The 2024 US housing market started on a positive note:
- Inventory was on the rise
- Mortgage rates had fallen from a 23-year high of 7.79% in October 2023 to the mid 6% range
- Existing home sales in January and February posted back-to-back monthly increases for the first time in more than 2 years
But when interest rates climbed to 7% in April, buyers pulled back and sales slumped during the traditional spring buying season.
Summer brought a surge of new listings, pushing national inventory to the highest level since 2020. When interest rates fell again in the fall, buyers took advantage of both the lower rates and higher supply, leading to a rise in closed sales and eating up the additional inventory.
Looking at the year as a whole, new listings increased year-over-year by 8.2% in 2024 compared to falling by 12.4% in 2023. Annual closed sales increased 1.8%.
In 2024, inventory rose each month compared to 2023 until December, which posted the only drop below the previous year for the whole year.
Instead of the encouraging beginning of the year, inventory ended the year slightly below the previous year.
Showing activity was less than previous years for much of the year… even lower than in 2019, before the pandemic. Homes received an average of 10 showings before reaching pending status.
Months supply of inventory takes into account not only the number of homes for sale, but also the rate at which they are being sold. The red line on the graph below shows the point at which the market is balanced between buyer and seller, about 5-6 months. It has been a buyer’s market since 2012, and even though the supply has been growing the last three years, 2024 ended with only a 1.8 month supply… a 5.3% decrease from last year.
The low supply of inventory meant that at least 9.7% of listings closed with multiple offers (as measured by listings that noted multiple offers). That was higher than December 2022, 2023, and even 2019 before the pandemic. Only COVID years 2020 and 2021 reported a higher percentage of multiple offers.
This resulted in an average list price received in November and December that was higher than in 2022 or 2023. Sellers received an average sale price of 97.0% of list price in 2024.
Average sale price continued its annual rise since 2012, to $450,131. Median sales price rose to $380,000 in 2024.
Year-end median sale prices varied by style and construction status. Median sale price of new construction condos increased year-over-year by 34.7%… from $766,554 in 2023 to $1,032,819 in 2024.
Historical home price growth has not been consistent. Last year showed only 1.4% appreciation while much of the country showed negative growth. The Twin Cities only showed depreciated prices in 2007, 2008, 2009 and 2011. 2024 showed Twin Cities home price growth of 3.3%.
Average cumulative days on the market before pending rose again for the third straight year after many years of falling, to 45 days.
Percent of distressed (foreclosures and short sales) fell to the lowest level in 20 years, to only 1.1% of total sales…. a long way down from the peak of 50.4% of sales in 2011. Gone are the days of foreclosure fire sales.
Months supply of homes available for sale varied by price range, construction status and housing type.
All price ranges favored sellers, and condos were in greatest supply. All types were way below the supply in 2011.
New construction properties were in higher supply than previously existing homes.
Economists are projecting a more active housing market in 2025… time will tell.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
Click here for local reports on 350+ area communities
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
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