BiggerPockets Real Estate Podcast
BiggerNews: The 2024 Housing Market in Review (What’s Coming Next?)
Dec 6, 2024
The 2024 housing market brought unexpected stability in home prices despite low buyer demand. Inventory issues and an ongoing affordability crisis have left many Americans renting rather than buying. Notable trends included surprising rent price growth in specific cities and challenges in the commercial real estate sector, especially for multifamily properties. The dynamics of rising prices amidst declining listings have created a complex landscape for investors. Get insights to navigate the evolving market for a successful 2025!
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Quick takeaways
- The 2024 housing market faced a significant slowdown in sales due to record-low affordability, impacting over 103 million American households unable to buy homes.
- Despite decreased buyer demand, home prices remained stable as potential sellers hesitated to enter the market, creating a 'lock-in effect' that limited inventory.
Deep dives
Sluggish Trends in Residential Real Estate
The residential real estate market in 2024 has experienced significant sluggishness, characterized by an annualized rate of approximately 3.8 million home sales, well below the long-term average of around 5.25 million. This dramatic decrease in activity reflects a decline of over 50% from the peaks seen during the pandemic, when sales neared 6 million. The primary reason for this sluggishness is the low affordability in the market, with the US Housing Affordability Index hitting a near 40-year low, which has led to diminished demand. An estimated 103 million American households find themselves unable to afford homes, despite a consistent desire to purchase, indicating a critical gap between the ability to buy and the desire to do so.
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