Los Angeles, California – As 2024 comes to a close, the housing market is experiencing a significant increase in supply. However, this surge in supply is accompanied by a concerning trend of homes remaining unsold for longer periods than usual. In November, active listings saw a 12.1% increase compared to the same time last year, reaching the highest level since 2020, as reported by Redfin.

An alarming find from the report revealed that over half (54.5%) of these homes had been on the market for at least 60 days without a contract of sale, marking the highest share for any November since 2019. The typical home that did manage to sell took an average of 43 days, the slowest pace for November since 2019. Real estate agent Meme Loggins from Redfin highlighted the importance of pricing homes correctly to avoid them sitting on the market for extended periods.

October saw mortgage rates surpass 7% and remain relatively high throughout the year, contributing to the challenges in the housing market. Furthermore, home prices continued to climb, with a 3.6% increase nationally in October compared to the same period last year, as per the latest report from S&P CoreLogic Case-Shiller. Brian Luke from S&P Dow Jones Indices noted the positive impact of reduced political uncertainty on the housing market.

Despite the sluggish sales pace, pending home sales rose in November, reaching the highest level in nearly two years. Lawrence Yun, chief economist at the National Association of Realtors, attributed this increase to consumers adjusting their expectations regarding mortgage rates and taking advantage of available inventory, which has become the new norm.

The trend of renters prolonging their renting period due to soaring home prices and additional costs associated with buying a property was also observed. The seller lock-in effect, where some sellers are hesitant to move due to low mortgage rates, eased in 2024 but did not significantly impact sales. Selma Hepp, chief economist at CoreLogic, pointed out the challenges faced by buyers in the current market, where the cost of homeownership has reached its highest point in decades when adjusted for inflation.

As the year ends, the housing market faces uncertainties moving into the new year, primarily due to elevated interest rates and the persistent increase in prices. The struggle for buyers, both first-time and existing homeowners, continues amidst a challenging environment shaped by rising costs and interest rates.