2024 Recap

by Cameron Gunnels

2024 Market Recap

The year began with a cautiously optimistic outlook, as home prices stabilized following the sharp climbs seen in previous years. According to the National Association of Realtors (NAR), the median home price in the first quarter of 2024 showed a modest increase of 1.5% year-over-year, a significant slowdown compared to the 6% increases witnessed during similar periods in the past decade. This stabilization can largely be attributed to the rise in housing inventory. The Chart below depicts the inventory trends throughout 2024.

Mortgage rates have decreased, slowly introducing more buyers into the market, but not enough to spark a buying frenzy. Per Freddie Mac, in 2024 mortgage rates averaged around 6.72% lower than the 2023 average of 6.81. The Pending home sales chart below defends my assertion that demand has increased year over year, but subtly.

2024 saw an increase in supply and an increase in demand. Lucky for us, the supply increase outpaced the demand increase. In 2024, homeowner equity reserves continued to grow, reaching levels we have not seen since 1959. This continued equity growth has allowed repeat buyers to deploy large cash reserves. So much so that 2024 saw an all-time high in cash buyers!

Homeowner equity growth 1995-2024

While this may appear to be a positive economic indicator, if these buyers used home equity lines of credit or some other financial debt product. We should ask ourselves, how levered are these buyers? Additionally, the uptick in cash buyers has had negative effects on first-time home buyers, creating an environment that makes it hard to compete if you are someone without access to capital. In 2024 we also saw an all-time low in first-time home buyers.

2024 was also the year of the much anticipated, debated, and widely reported NAR ruling. Initially, industry outsiders reported that this ruling would fundamentally change the role of real estate agents. To the contrary, 2024 saw an all-time low in "for sale by owner" listings. Buyer agent use also continued to remain strong.