U.S. Housing Report: Mortgage Rates, Inventory Gains, and Price Volatility: Navigating a Shifting Market in Late 2024

Per Realtor.com’s data library (click “Weekly Inventory” and “View US Data” to download the spreadsheet), the median listing price for the week ending October 5th decreased by 0.1%, marking the 16th consecutive week with year-over-year (YoY) price drops. By the week ending October 19th, there was no YoY change in median listing prices. Asking prices are falling due to increased inventory, creating competition among sellers. However, sales remain relatively low as elevated home prices over the past two years have kept many buyers on the sidelines.

“In the markets we serve, I wouldn’t label home sales as stagnant—rather, they reflect the ongoing dynamics of supply and demand. Low inventory alongside high demand continues to drive interest,” shared Christina Gibbons of Christie’s International Real Estate Group in New Jersey. “Desirable properties are still attracting multiple offers, sometimes selling above asking price, indicating a vibrant market.”

For the week ending October 5th, the active listing count nationwide rose by 30.5%, continuing a 48-week trend of YoY growth. For the week ending October 19th, the count increased by 28.7%. This provides homebuyers more negotiating power, but affordability remains challenging due to high rates and home prices. Economically, the housing market is much different from 2021 and 2022, when buyers often bid over asking price, waived contingencies, and paid above appraised values to secure a home.

Melissa Leifer from Keller Williams NYC offered insight into the hyper-local nature of these dynamics: “It’s very neighborhood-specific here [in New York City]. Eighty percent of the market will get a full-ask offer within four weeks if property is priced correctly. Certain neighborhoods in the Brooklyn townhouse market are regularly seeing prices bid up $350-400k, sometimes more.”

New listings remain sluggish. Realtor.com data shows YoY inventory growth has held steady at 30%–38% since May, with only single-digit increases in recent weeks, marking the smallest gains since the week ending April 13th. While 2024’s inventory growth (37% from January–August) outpaces the pre-COVID average (16% over the same period in 2017–2019), it lags significantly behind the 93% surge seen in 2022, reflecting a slower but steady rise in available listings.

While new listings rose by 8% YoY for the week ending October 5th and 4.7% for the week ending October 19th, they have generally trended lower since the end of July. In contrast, new listings rose by over 10% from February to April this year. Therefore, growth in new supply has slowed, affecting housing inventory growth. According to Realtor.com, new listings are dependent on mortgage rates, which “will need to decrease further for many buyers to feel ‘unlocked,’” since 84% of current mortgages are at a rate of 6% or lower.

Gibbons notes that, despite sluggish listings, demand remains strong: “Notably, we continue to see an influx of buyers from New York City and significant local movement. Desirable properties are still attracting multiple offers, sometimes selling above asking price.”

For the weeks ending October 5th and 19th, median days on the market data shows homes taking an average of eight days longer to sell than a year ago, marking the 23rd consecutive week of extended market time. This is much different from October 2023 through March 2024, when homes sold faster compared to the prior year. Although inventory is higher than last year, homes are taking longer to sell, which keeps sales low. Furthermore, new listings have lost momentum, decreasing housing supply.

This prolonged time on the market impacts overall sales volume, leading to slower inventory turnover. Gibbons advises buyers to act now despite fluctuating rates: “I encourage buyers to find their ideal home with the understanding that they can refinance when rates drop in the future. In a competitive market, facing multiple offer situations may require reassessing price points to align with what’s realistic.”

According to Realtor.com, the number of price-reduced listings rose 24.4% YoY for the week ending October 5th, and for the week ending October 19th, “the share of listings with price cuts grew to 18.6%, up 0.9 percentage points,” which has been higher than last year for the past 38 weeks. However, the gains are muted now compared to the triple-digit increase observed between November 2022 and March 2023. A surplus of homes remaining on the market, combined with rising inventory and price drops, could put considerable downward pressure on overall home prices.

Realtor.com does not expect a sharp correction in home prices, although growth in asking prices is anticipated to slow due to increased inventory, seasonal effects, and sluggish sales driven by high mortgage rates and low affordability.

As aforementioned, mortgage rates remain a significant factor in the U.S. housing market. While rates decreased to just above 6% a month ago, they have since risen to 6.85% as of October 21st, according to Mortgage News Daily. This report indicates, “We’ve gone from being fairly close to 6% in mid-September to being nearly as close to 7% today.” MND says this fluctuation “was particularly quick and frustratingly lacking in satisfying explanations,” which, as the Realtor.com report has noted, makes potential homeowners reluctant to list their properties for sale, especially considering that over six out of ten mortgages have rates below 4%, according to a May 16th Freddie Mac report.

As mortgage rates are expected to remain a major factor, federal policies and potential rate cuts could attract more buyers. Leifer explains how such cuts might change the landscape: “In New York City, more people will buy and sell. If you have a finance contingency, you will have time to aggressively bid. However, sellers must realistically price their homes—overpriced apartments are still sitting and chasing the market down.”

Gibbons anticipates increased demand if rates drop: “Future federal policies and potential rate cuts are likely to attract more buyers who have been waiting for lower rates. With supply expected to remain low, increased demand will most likely drive home prices higher.”

The quandary is real: While inventory is slowly recovering, persistently high and fluctuating mortgage rates, inflated home prices, and various economic affordability issues are severely impacting home sales. However, a Redfin report from October 10th indicates that homebuyers are returning to the market. The lingering question is whether this trend will be short-lived given the recent spike in mortgage rates. According to an October 24th Redfin report, homebuying demand is holding steady despite election uncertainty and elevated mortgage rates.

The October 10th Redfin report states that home sales are rising across most major U.S. metros, and housing payments are falling, though mortgage rates increased following the October 4th Economic News Release from the U.S. Bureau of Labor Statistics, which showed more jobs added and rising inflation. But the data can be confusing: Are home sales really rising despite higher mortgage rates, or are we seeing lagging data reflecting the past U.S. housing market? Here is some context:

According to Mortgage News Daily, on October 25th, the 30-year fixed mortgage rate was 6.90%, down from 7.98% a year ago, a decrease of 1.08% or 108 basis points. Rates are lower than in 2023, but still high enough to cause considerable financial turmoil in the market. What is the concern? Redfin’s data on pending and closed home sales, days on the market, and median prices are lagging indicators, reflecting market conditions from one to 1.5 months ago.

The October 10th report data covers the four weeks ending October 6th, primarily reflecting September’s market, which, in turn, shows trends from August. For example, in August, 30-year fixed rates dropped to 6.40%, down from 7.14% the prior month, supporting Redfin’s lagging data on rising sales. However, rates began climbing again in October, nearing 7% as of October 25th, a leading indicator hinting at a possible slowdown in homebuying demand.

The October 24th Redfin report explained the latest mortgage rate problem: “Investors in the bond market are particularly worried about the possibility of increased government debt after the election,” said Redfin Economic Research Lead Chen Zhao. “They’re concerned that one party could end up controlling both the White House and Congress, which would increase government spending more. That concern, along with strong economic data, is pushing up 10-year treasury yields and mortgage rates.”

The October 10th Redfin report showed a 2% YoY rise in pending home sales, the largest since November 2021, with a 5.7% YoY increase in new listings, more home tours, and an 8% month-over-month (MoM) gain in mortgage-purchase applications. Redfin credits this to lower mortgage rates and the Fed’s September 18th 50-basis-point rate cut, which reduced housing payments to $2,526, the lowest since January. Redfin added, “We expect some buyers may back off due to rising rates, but not all of them,” as mortgage rates are about 1% lower than last year at this time.

The October 24th Redfin report states that pending home sales rose 3.5% and new listings increased 2.2% YoY through October 20th. However, rising rates have pushed the median U.S. housing payment slightly higher to $2,587.

Redfin’s October 24th median sale price graph shows prices declining from $396,000 in June, mirroring the 2023 trajectory, though still 3%–5% above July 2022 levels. The pending sales graph shows negative progress most of the year, following 2023 levels. The last positive gain in pending sales was 3.6% during the four weeks ending November 28th, 2021. Meanwhile, the months of supply rose by 0.6 months YoY, a three-year high, while median days on the market increased by 7 days from the same period in 2023.

Redfin’s Key Market Data from over 400 U.S. metros for the four weeks ending October 6th showed a median sale price of $383,225, a 4% YoY increase, while the median asking price rose 5.7%, the largest increase since 2022. Pending sales hit 77,951, new listings 89,388, and months of supply climbed to 3.9.

For the four weeks ending October 20th, median sale prices increased to $385,250, up 4.7% YoY, while the median asking price reached $399,098, up 6.1%. Pending sales and new listings decreased to 75,156, and 84,285, respectively, with months of supply increasing to 4.1.

In the last four weeks, sales and listing activity have slowed, with homes lingering longer on the market. This lagging indicator, along with recent Realtor.com and Redfin data, suggests the market may trend downward through year’s end.

Will the U.S. housing market experience a rebound? Media sources and realty experts are cautiously optimistic about 2025.

Leifer predicts the market will remain competitive, particularly for sellers, emphasizing the importance of timing: “I think, overall, it will be better for sellers. Buyers are going to end up paying more. I don’t foresee a huge influx of inventory. There will definitely be more on the market, but I think demand for a certain kind of home is still going to outweigh supply. Buyers understand that if they wait for a rate cut, they will be competing with 2x as many people once that happens.”

Gibbons expects market conditions to evolve by mid-2025: “By the second or third quarter, we should see an increase in available homes. If mortgage rates decrease and inventory rises, the market may shift to be more favorable for buyers.”

In our next article, HAVEN will take a further look at the numbers: how the current U.S. housing market is reacting to prevailing economic factors influencing real estate.