Why haven’t we seen a national home price correction in 2024?

Notably, we compared 2022 and 2023 data and noted positive year-over-year data from October 2024, which you can see in the chart below.

Now, back to reality. As I have always said, we are operating from the lowest sales figures ever recorded in history – significantly lower when adjusted for headcount. When existing home sales crashed in the early 1980s, they fell from 4 million to 2 million. There are similarities between the early 1980s and today’s housing market: both periods experienced significant home price growth, a huge decline in sales, and no home price declines.

However, demand for housing increased when mortgage rates fell during a recession in the early 1980s. A similar situation could happen now, but we haven’t had mortgage rates low enough for long enough to significantly increase home sales.

A few important notes about the graphs below

1. Active inventory usually declines this time of year, but it didn’t drop below 1 million in 2024. I choose to celebrate small victories when I can. For me, the highlight of 2024 was the growth in active inventory.

2. Median sales price data began improving year-over-year in September, consistent with the trends indicated by our tracker and new home price index. As a result, my 2024 price prediction of 2.33% is likely incorrect when all house price data groups are collected, I will be too low.

Whatever happened to the premise that home prices follow sales volume and that higher mortgage rates would lead to a price crash? Let me share the graph below with you all. Since 1942, the only time home prices dropped significantly was from 2007 to 2011, during a market characterized by much higher inventory, distressed sellers, and monthly supply periods of more than 10 months. That situation does not exist in today’s housing market because the active inventory is almost 1 million, not 4 million as in 2007. Also, the monthly supply is 3.3 months, not the 10.8 months we saw in 2008 with distressed sellers .

Entering 2025, our weekly tracker has charted weakness in recent weeks, especially as mortgage rates headed toward 7.25%. The previous two weeks saw the growth of application data and we will monitor all new weekly housing data to keep you at home in what is happening in real time so you don’t have to wait for old data.