As we move through the final months of 2024, signs are emerging that the housing market may be turning a corner. For the first time in over three years, annual existing-home sales rose in October, according to the National Association of Realtors (NAR). This uptick offers a glimmer of hope to buyers, sellers, and real estate professionals alike, signaling that the worst of the downturn may be behind us.
October’s Market Highlights
NAR’s latest market report shows existing-home sales — encompassing single-family homes, townhomes, condominiums, and co-ops — increased by 3.4% month-over-month and 2.9% year-over-year. This marks a significant shift after years of declining sales.
Key Metrics:
• Seasonally Adjusted Sales Rate: 3.96 million
• Median Home Price: $391,600 (+4.0% year-over-year)
• Inventory Levels: 1.37 million units (+19.1% year-over-year)
What’s driving this shift? According to NAR Chief Economist Lawrence Yun, stabilizing mortgage rates and steady economic growth are creating renewed buyer interest. He explains, “The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions.”
Regional Performance: A Closer Look
Sales activity varied across the country, reflecting regional differences in inventory, pricing, and demand:
• Midwest: +1.1% year-over-year
• South: +2.3% year-over-year
• West: +8.5% year-over-year
• Northeast: Sales remained flat
The West’s 8.5% increase stands out as a particularly strong indicator of market recovery in a region that has faced affordability challenges in recent years.
What Does This Mean for Buyers and Sellers?
For Buyers:
Mortgage rates remain high, but the Federal Reserve’s recent rate cuts could offer relief in the coming months. Realtor.com Chief Economist Danielle Hale notes that VA loans may provide a significant advantage for eligible buyers. With lower down payments, lower credit score requirements, and reduced mortgage rates, VA loans present an opportunity for substantial savings.
For Sellers:
Rising home prices (+4.0%) mean increasing wealth for homeowners nationwide. However, as inventory grows and more homes hit the market, sellers should focus on competitive pricing and strategic marketing to attract buyers.
The Role of Mortgage Rates in the Housing Market
Mortgage rates continue to wield significant influence over home sales activity. Despite the Fed’s rate cuts, mortgage rates have remained stubbornly high, hovering in the 6% range. Hale predicts this could weigh on early 2025 activity but notes that stabilizing rates may encourage more buyers to enter the market as the year progresses.
Looking Ahead: 2025 and Beyond
What’s next for the housing market? Experts anticipate moderating price growth as inventory expands and homebuilding activity increases. Yun remains optimistic about sustained economic growth and job gains fueling housing demand. However, affordability will continue to be a challenge, particularly for first-time buyers.
Takeaways for Real Estate Professionals
The recent rise in existing-home sales is a welcome development, but the market remains complex. Here are a few strategies to navigate these conditions:
1. Educate Buyers: Provide resources on VA loans and other financing options to help buyers overcome affordability challenges.
2. Highlight Value: Focus on how stabilizing rates and inventory growth create opportunities for buyers.
3. Strategic Marketing: Use local insights to position listings competitively in an evolving market.
As 2024 winds down, there’s reason for cautious optimism. Whether you’re buying, selling, understanding these trends will help you make informed decisions in the months ahead. Contact Corken + Company to help with all your real estate needs.
