Elizabeth Renter, Nerdwallet
Buying a house in the fourth quarter of 2024 would have been like finding a kindergarten. Home prices fell slightly and the number of homes creeped up, but the market remained particularly challenging for first-time home buyers.
The final quarter of 2024 was as typical as expected in the current housing market. In other words, it was a little strange. Prices tend to drop slightly as the weather cools, which was the case last year. However, it backs a typical fourth quarter trend, but the number of homes listed for sale has increased slightly.
However, the number of existing homes sold in 2024 is the lowest since 1995, despite slightly higher year-end stocks and lower year-end prices.
For first-time buyers, strict home buying conditions are particularly challenging. Thinner credit history may contribute to the challenge, but creditworthiness is not the only obstacle.
According to Nerdwallet’s 2025 Home Buyer Report, affordability factors (such as cost of living, shortage of down payments, low income, etc.) are one of the main obstacles that cause non-homeowners to buy from purchases. Additionally, 26% of non-homeowners and 23% of homeowners agree. Mortgage interest rates are too high. If you exacerbate the issue, the list shortages can continue as long as the rates implement current owners.
Despite the cold weather, stock remains
Generally, when the weather cools, the number of lists decreases. However, over the past few years, it has taught us that seasonal fluctuations can be atypical when other complex factors exist, such as the pandemic, housing shortages, and dramatic changes in mortgage rates.
In the last quarter of 2024, the number of national lists actually increased slightly (+2%). This is a 26% increase from a year ago, but the number of homes for sale is still 18% shy in the fourth quarter of 2019.
A handful of the most populous metros experienced a significant increase in stock in the fourth quarter. Miami and Baltimore had an 11% increase in the number of active lists compared to the previous quarter. The Las Vegas list rose 14%, and Phoenix saw the list of more than 16% in the last quarter of the year.
Inventories have risen primarily in warmer climates over the past year. In San Diego, the list rose 53% year-on-year. Miami and Denver (+51%), Orlando, Florida (+49%), Las Vegas (+46%), Jacksonville, Florida (+44%) and Atlanta (+43%) also experienced significant jumps in stock.
Home Buyer Tips: Continue with a clear budget and potential compromises in mind and proceed to the home buying process. The competition may be cool in a cool month, but the shortage of available homes is so widespread that you may still encounter a bid war. With a potential home purchase, consider how competitive you are before making an offer. Knowing you are willing to compromise, set up a solid “Walk Away” number. It’s easy to get caught up in winning a fight for your home with multiple offers, but be careful not to push you out of your comfort zone. When the dust settles down and hand over the keys, you want to make sure the prize is worth the cost you agreed to pay.
Prices will fall in quarter and prices will rise
After adjusting for inflation, the home price price fell slightly (-4%) in the fourth quarter. However, the benefits of this slight decline were alleviated by rising mortgage rates. In the third quarter, the average rate fell slightly on 30-year fixed mortgages, but the fourth was once again climbed.
But there’s good news. After considering inflation, none of the 50 most populous metros surveyed had risen in price prices. This means that the buyer’s dollar went far, if not more, in the fourth quarter.
The three metros, Buffalo, New York, Milwaukee and Cincinnati, each have dropped by an average of 8% in prices on their list. Also, two very expensive markets saw average price prices below $1 million. San Francisco reached $952,000, while San Diego fell to $971,000 in the fourth quarter.
»Data: Listing prices and payments for the 50 largest metro area
Home Buyer Tips: There are many considerations to consider when setting up a home budget, but at least it’s the home price and your income. Typically, monthly housing payments include what is known as the principal (money borrowed), interest rates, homeowner insurance, real estate taxes, and private mortgage insurance (PMI). Additionally, other monthly obligations such as debt payments and ongoing expenses must be taken into consideration.
Affordable home calculator will help you organize it and determine how much you can afford. According to one rule of thumb, which suggests that housing costs absorb less than 28% of monthly pre-tax income, a home with an average price of 4th quarter requires an annual income of $135,000. This is before you consider any obligations or other obligations.
Looking ahead: 2025 Home Bee Season
Home prices generally rise when the weather warms and demand rises, but they rarely escape in 2025. Price growth has declined over the past few years after rising from mid-2020 to mid-2022 to mid-2022. So, while prices can waft when we enter the home buying season, buyers who are already focusing on real estate listings should not expect much of an additional sticker shock.
The number of homes available for sale could continue to climb. How quickly that number rises depends a bit on the mortgage fee. Lower rates will tempt more existing owners to sell. However, inventory also depends on new construction. First-time buyers may think buying a brand new home is out of the question, but some may be more affordable than existing homes in your area. Additionally, new construction can also involve incentives and even interest rate acquisitions to make purchases more affordable. Local real estate agents can help you weigh the pros and cons of both worlds with localized knowledge.
Additional data and complete methodology can be found in the original article published on Nerdwallet.
Elizabeth tenant writes for Nald Wallet. Email: elizabeth@nerdwallet.com. Twitter: @elizabethrenter.
Article First-time Home Buyer Data: Listing, 4th Quarter Prices were originally published on Nerdwallet.
Original issue: March 10th, 2025, 4:05pm EDT
