Higher Inventory—and Lower Prices—Being Driven by Smaller-Sized Unit Listings

In December 2024, the median home price in the U.S. declined—but median price per square foot increased by 1.3%. 

This data comes courtesy of the latest monthly real estate market report from Realtor.com®. The report suggests that current price figures are due to more smaller/affordable listings entering the market, bringing down median price overall but increasing median price per square foot.

The report, which spotlights home inventory and pricing, found that December 2024 continued a 14-month streak of home listing annual increases. Specifically, the number of homes listed for sale in the U.S. during December 2024 was 22% higher than it was a year prior. However, after steadily growing since around February 2024, monthly inventory growth slowed this month, and is now at its lowest level since June. 

Some of this drop can be attributed to seasonality. In Realtor.com’s own news write-up of the report, the company’s Senior Economic Research Analyst Hannah Jones said in a statement that “(i)t is typical for the housing market to slow down at the end of the year as buyers and sellers focus their attention on end-of-year festivities and push activity to the new year, once the market and the weather are warmer.” 

However, Jones also described the drop as larger than a typical winter season shift. Realtor.com has pinned this larger-than-expected drop in part on elevated mortgage rates currently hovering around 6%.

“We find that high mortgage rates continue to bring a slow market, with December 2024 being the slowest December since 2019 and the slowest month in nearly two years,” said Realtor.com Senior Economist Ralph McLaughlin in a statement.

New listings were up only slightly (0.9%) in December over last year and median prices were down by 1.8% (coming in at $402,502). Listings with price cuts only barely changed year-over-year, going from 12.7% of listings in December 2023 to 12.9% in December 2024.

In December 2024, homes were found to have spent an average of 70 days on the market, which McLaughlin described as “the slowest December in five years and the slowest month since January 2023.” This is an eight-day increase from November 2024, when homes spent an average of 62 days on the market.

Regional breakdown

The report found that the count of active listings (homes currently available for sale but not under contract or pending) grew year-over-year in all four major U.S. census regions—the Northeast, the Midwest, the South and the West. Active listing growth in the South and West also outpaced the Northeast and Midwest:

1. South: 26.7%
2. West: 23.7%
3. Midwest: 15.2%
4. Northeast: 6.9%

However, the new listing count declined year-over-year in the Northeast (6.6%) and Midwest (5.6%). Median listing prices increased slightly in the Northeast, by 0.4%, and in the Midwest, by 0.7%, but decreased in the South, by 2.3%, and the West, by 1.3%. Compared to December 2023, homes on average spent more days on the market this December:

1. Midwest: 4 more days
2. Northeast: 5
3. West: 8
4. Southeast: 10 

These numbers could suggest that buyers have more choice in the Southern and Western markets (hence prices dropping and homes spending more time on the market), whereas sellers hold more market power in the Northeast and Midwest (hence prices going up and listed homes selling more quickly).

In addition to the national numbers, the report also surveyed the 50 largest metro areas in the United States. In December 2024, the metro areas with the greatest increase in active listings year-over-year were all Southern and Western markets:

1. Miami, Florida (45.4% increase in active listings year-over-year)
2. Orlando, Florida (42.4% increase)
3. Denver, Colorado (41.9% increase)
4. Las Vegas, Nevada (41.5% increase)
5. San Diego, California (41.2% increase)

Metro areas that saw the smallest increase in active listings year-over-year were primarily located in the Northeast:

1. New York City, New York (0.3% increase in active listings year-over-year)
2. Boston, Massachusetts (1.1% increase)
3. Rochester, New York (1.4% increase)
4. Hartford, Connecticut (3.4% increase)
5. Cleveland, Ohio (3.7% increase)

Only the San Jose, California, metro area posted an outright decline in active listings year-over-year, by 1%.

The areas that experienced the greatest annual price increases were primarily in the Midwest, with some in the Mid-Atlantic portion of the Northeast and South:

1. Cleveland, Ohio (prices rose annually 9.1%; current median is $239,950)
2. Milwaukee, Wisconsin (6.7%; $357,450)
3. Detroit, Michigan (6.2%; $249,900)
4. Charlotte, North Carolina (5.6%; $422,450)
5. Philadelphia, Pennsylvania (5.3%; $358,075)

The greatest annual price decreases in the top 50 metro areas included two Florida markets:

1. San Francisco, California (prices dropped by 10.9% annually; current median is $889,500)
2. Miami, Florida (9.9% drop;, $522,500)
3. Austin, Texas (7.7% drop; $498,500)
4. Kansas City, Missouri (7.5% drop; $369,995)
5. Tampa Bay, Florida (6% drop; $395,000)

The top metro areas with the lowest annual price changes included:

1. New Orleans, Louisiana (no substantive annual change; current median remains $325,000)
2. Boston, Massachusetts (0.2% annual increase; $801,383)
3. Houston, Texas (0.4% annual increase; $361,405)
4. Buffalo, New York (0.4% annual increase; $249,950)
5. Raleigh, North Carolina (0.4% annual decrease; $444,498)

For the full December Realtor.com report, click here.