American Home Sales Hit a Two-Year Low Amid High Prices and Mortgage Rates Dream
Newly built home sales reached a two-year low in October 2024, driven by elevated mortgage rates and soaring prices. According to the St. Louis Federal Reserve, sales dropped by over 100,000 units month-on-month, hitting an annualised rate of 610,000. This marks a 17.3% decline compared to September’s 738,000 sales, signalling ongoing struggles in the housing market.
The last time sales were this low was in November 2023, with 611,000 units sold. For context, July 2022 reported just 519,000 sales, reflecting the broader difficulties buyers face due to high costs and interest rates. Many recall better conditions during the pandemic, when low rates drove a surge in purchases.
Nick Gerli, CEO of Reventure, explained the situation: “Buyers are fatigued by record prices and stubbornly high rates. Until prices drop or incomes rise, homeownership will remain challenging.”
Median home prices have jumped over $100,000 since 2020, reaching $420,400 in the third quarter of 2024. Unsurprisingly, this has slowed sales of not just new homes but existing ones too. The National Association of Realtors (NAR) reported 3.96 million existing home sales in October 2024, down from 6.43 million in January 2022 when interest rates were near zero.
Despite minor fluctuations, sales haven’t returned to pre-pandemic levels of over 5 million per month. According to the University of Michigan, consumer confidence is also low, with 82% of surveyed Americans in October 2024 saying it’s a bad time to buy a home, up from 77% the year prior.
While discussions about the market ripple through Reddit and shows like American Dream TV explore the dream of homeownership, affordability challenges remain stark. Buyers continue to wait for a shift in market conditions to align prices, rates, and wages.