As 2024 reaches its final months, the housing market presents a mixed bag of developments. Recent data indicates a significant uptick in housing supply, with active listings ballooning to levels not witnessed since 2020. According to Redfin’s latest report, the number of homes listed for sale in November 2024 surged by 12.1% compared to the same month in the previous year. This increase is encouraging for potential buyers who have been frustrated by a scarcity of options. However, the reality is not as rosy as it seems; a substantial portion of this new supply consists of homes that have languished unsold for an extended period, reflecting a stagnation in market activity that could signify deeper issues at play.
A Stale Market: The Impact of Unsold Listings
Compounding the issue of rising inventory is the startling statistic that over half of these listings (54.5%) had been sitting on the market for at least 60 days. This represents the highest proportion of stale listings for any November since 2019, showcasing ongoing challenges in the market’s dynamics. The typical home that successfully went under contract took an elongated 43 days to do so, marking the slowest pace for November transactions since 2019. The prevailing sentiment among real estate agents, such as Meme Loggins, highlights a crucial point: the importance of competitive pricing in an environment saturated with listings. Homes that are well-priced and maintained fly off the market in mere days, contrasting sharply with those that are overvalued, which can sit idly for months.
Another complicating factor for the housing market is the consistent elevation of mortgage rates. As reported by Mortgage News Daily, mortgage rates have hovered above 7% for much of the fall and winter. Coupled with rising home prices—which saw an increase of 3.6% nationally in October 2024—many prospective buyers find themselves caught in a financial bind. Economic indicators suggest that this upward trajectory in property values continues to alienate many would-be homeowners, setting the stage for a protracted period of hesitation in the market.
Amid these testing conditions, buyer behavior is evolving. The National Association of Realtors has noted an increase in pending home sales, marking the highest level seen in nearly two years. However, this improvement arises from a particularly sluggish previous year, indicating that although transactions are picking up, they are still coming off a low base. Lawrence Yun, the chief economist for NAR, points to a recalibrating of consumer expectations concerning mortgage rates. Buyers are adjusting to a “new normal,” with rates consistently above 6%, and they are increasingly taking advantage of a broader inventory, which may ultimately empower them in negotiations.
As the year closes, the outlook for the future remains uncertain. The slower selling pace, compounded by persistently high interest rates, threatens to dampen any potential recovery in the housing market. While some individuals remain locked into rental agreements or feel disincentivized to sell due to favorable mortgage rates, there is a distinct lack of urgency among buyers. Rising costs associated with moving and brokerage services further deter purchasing behavior, illustrating a growing disconnect between supply and actual demand.
In review, the housing market as we head into 2025 is characterized by an unusual landscape of increased supply coupled with slow sales and elevated mortgage rates. While there are glimpses of hope—like rising pending home sales—the persistence of unsold listings and rising ownership costs suggests greater systemic issues tied to inflation and financial accessibility. Real estate agents, sellers, and potential buyers alike must navigate these complexities with an awareness of the evolving market dynamics, emphasizing the need for realistic pricing strategies and acute awareness of broader economic factors. It remains to be seen how the market will adapt in response to these pressures, but a cautious optimism may be the best stance moving forward.