The highlights and hurdles of the 2024 housing market

SALT LAKE CITY — Waiting for the perfect time to enter the housing market in 2024 was like waiting for your stock to go to the moon — a fanciful hope.

This year isn't alone in that regard; the past few years have been difficult for potential homeowners to invest due to high interest rates, a lack of supply and rising home prices. As those currently sidelined wait with hope that 2025 will be kinder to them in the housing category, here's a look at the most significant housing moments of 2024:

Record home prices

This summer saw a peak in home prices. In June, with a U.S. average home price of $426,900, prices increased by 5.4% year over year, complemented by mortgage rates in the 6% range.

"The upward pressure on home prices is making this the most unaffordable housing market in history," Lisa Sturtevant, Bright MLS chief economist, told Fox Business. "First-time and moderate-income homebuyers, in particular, increasingly are being left out of the housing market."

Hope remained bleak in the third quarter. According to Redfin, the median home sale price in November was $430,010, up 5.4% from last year. Home sales in Utah averaged $538,500.

Renters outpaced homeowners

Renters increased by 2.7% in the third quarter of 2024, compared to 0.9% of homeowner growth. According to Redfin, the increase in renter households is the highest seen since 2015.

"So many people are struggling to see how they will ever become homeowners — especially those from younger generations," Redfin senior economist Sheharyar Bokhari said in the press release. "With home prices at record highs and mortgage rates remaining elevated, renting is increasingly the only viable choice for many young people and families. Building more homes will help address that, but we also have to recognize that Gen Z and future generations may not view homeownership as a life goal, and the rentership rate may continue to rise for years to come."

Another survey this year by Intuit Credit Karma found that nearly 50% of people prefer renting to buying a home. Though purchasing is generally more affordable in the long run, renting seems more appealing because, per Bankrate, monthly home costs are 37% more than monthly rent costs.

Zillow reported that the current average rent in the U.S. is $2,000, with Utah's average slightly lower at $1,800.

The National Association of Realtors settlement

In March, the National Association of Realtors settled a $418 million lawsuit and established new rules for real estate agents, buyers and sellers taken into effect last August.

When a home was previously listed by an agent, it typically included a buyer's agent compensation fee, which the seller would pay. While these payments could be negotiated, they often remained unchanged.

On average, the total compensation in the U.S. is around 6% of the sale price, split between the listing agent and the buyer's agent.

Alex McEwen, founder of McEwen Realtors and a third-generation realtor in Salt Lake City, previously told Deseret News the most significant change the home selling process will see is there will no longer be a "predetermined universal offer of compensation from the seller."

"Buyers will soon face a tough choice of whether to 1) go without representation on one of the biggest purchases of their lives, 2) only buy if a property's sellers are willing to contribute toward buyers agent costs, or 3) pay for their agent out of pocket," she added. "I think sellers will end up saving some money, and buyers will likely end up spending more money than they were before."

The issue of supply and demand

The housing crisis has a lot to do with the fact that there are not enough homes.

"The supply of homes for sale in the U.S., typically measured in months of housing supply, reached a record low of just 1.6 months in January 2022," per Bankrate. "And while inventory has increased considerably since then — the figure was 4.2 months in August 2024 — the supply is still not enough to meet the demand."

In Utah specifically, Gov. Spencer Cox has used his platform to fight the growing need for supply as the state's population continues to grow. To combat the issue, Cox's office announced last year a plan to build 35,000 new starter homes by 2028 with a $150 million budget .

"I think the single greatest threat to our future prosperity is the price of housing in our state," he said earlier this year during the Utah Economic Outlook & Public Policy Summit .

"The American dream is dead if you cannot own a home. I believe that home ownership is central to everything that makes us prosperous, keeps us rooted, helps with our economy, helps with our culture, helps with our neighborhoods, everything that we value."

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