As we head into a new year, many people are wondering what’s going to happen in the real estate market. To answer that question, we need to take a closer look at recent shifts and consider what they mean for home buyers and sellers.
For today’s blog post, let’s dig into the pre-holiday surge in home sales and what it means for the housing market in 2025.
You read that right: Sales of previously-owned homes (i.e. not new construction) increased in November 2024, bringing new hope into the housing market just before the holidays! In total, existing-home sales jumped 4.8 percent year-over-year in October. Building on this momentum, they increased 6.1 percent in November — representing the largest year-over-year gain since June 2021.
These numbers show that more home buyers are entering the market. The question is, why now? Well, the economy continues to improve, showing a strong growth in new jobs each month. Additionally, housing inventory is in a better spot than it was a year ago.
Even better, home prices continue to increase. At the end of 2024, the median existing-home sales price hit $406,100.00 — up 4.7 percent from the previous year. This jump also marked the 17th month in a row of year-over-year price increases.
Mortgage rates also remain up with an average of 6.81 percent. This number comes after a two-year low in September of 6.18 percent. Chances are, home buyers have adjusted to these rates and no longer expect the three to four percent that occurred during the pandemic.
While the supply of houses on the market actually went down, it still remained higher than the levels seen a year earlier.
The number of closed existing home sales grew across the United States. Specifically in the South, they climbed 5.6 percent — up 3.3 percent from one year before. The median price increased by 2.8 percent from the year before, hitting $361,300.00.
Sales of new homes also increased, making up 15 percent of last year’s total sales. This percentage was the highest of the past 17 years (!). Surveys show that 42 percent of buyers want to avoid renovations and plumbing and electrical problems, while 27 percent appreciate the option to customize design features. Plus, 15 percent focused on new homes due to a lack of pre-owned inventory.
So what does all this data mean? The hope is that some of the previous challenges for home buyers will ease up this year, allowing 2025 sales to beat those of 2024. Even so, buyers should still expect a competitive market in the months ahead.
Happy house hunting!
Let The Urban Dog Group help you with your real estate needs. Contact Christine Elias at caerealestate@gmail.com.
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