2024 Housing Market Recap
2024 Housing Market RecapIn 2024, the U.S. housing market faced high mortgage rates, limited inventory, and affordability issues. Mortgage rates averaged around 7%, deterring buyers and sellers, leading to the lowest home sales since 1995. Despite these challenges, home prices continued to rise due to strong demand and low supply. Pending home sales increased by 2.2% in November, marking four consecutive months of growth. As 2025 approaches, affordability remains a major concern.
Fed Rate Cuts vs. Mortgage Rates
The Federal Reserve cut interest rates three times in late 2024, lowering them from 5.25%-5.50% to 4.25%-4.50% to counter slowing inflation. While mortgage rates briefly dropped from nearly 8% to 6.2%, they rebounded to 7% by year-end due to volatile bond markets and strong demand. Unlike short-term loans, fixed mortgage rates are tied to the 10-year Treasury yield, explaining their limited response to Fed cuts.
2025 Real Estate Outlook
At the NAR Real Estate Forecast Summit, experts projected mortgage rates around 6.5%, with potential declines later in the year. Mortgage origination volumes are expected to grow 20%, with home sales rising 5% for existing homes and 10% for new homes. Home prices may see modest 1.5% growth, while multifamily rent growth remains flat.
Tariffs, Rates, and What Comes Next
The ripple effects of recent financial turmoil and rising tariffs are beginning to show in housing. While buyer activity is still holding—pending home sales are slightly above last year—early signs of softening are emerging. Mortgage rates have crept up from 6.82% to 6.98% since early April, and 35% of listings have taken a price cut, the highest April rate in over a decade. National inventory is up 35% year-over-year, indicating the end of the shortage may be near. But the real story is local: the impact will vary by price point and geography. Buyers remain highly rate-sensitive, and the strength of today’s homeowners—with low leverage and locked-in 3% loans—is limiting forced sales. For now, the market is stable, but we’re watching closely. If confidence cracks, it will show up quickly—in pricing, inventory, and demand.
Zillow’s New Policy: What It Means for Your Listings
Zillow has announced a forthcoming change to its listing policy, which will go into effect in May 2025. Under the new rule, any home that is publicly marketed—whether through yard signs, social media, or brokerage websites—must be entered into a Multiple Listing Service (MLS) within one business day. Listings that are not entered into the MLS within this timeframe will be excluded from Zillow and Trulia for the duration of their availability. This policy aligns with the National Association of Realtors’ (NAR) Clear Cooperation Policy, which aims to promote broad and equal access to listing information.
At Compass, we understand that marketing strategies can vary based on each client’s needs. While real estate portals like Zillow play a role in today’s home search experience, many sellers also find value in alternative approaches, such as pre-marketing through platforms like Compass Private Exclusives or Compass Coming Soon. In fact, in just February and March of this year, over half of Compass sellers chose to pursue these strategies.
Zillow’s new policy may prompt some important questions: Should listing exposure be determined by a national portal’s rules? Or should homeowners retain the ability to decide which marketing approach best suits their goals?
Click the button below to the full report.
Looking for San Diego real estate updates?
Sign up for my information-packed newsletter and keep up-to-date with local market trends, real estate news, and recent activity.
