The average sales price of new homes in the United States experienced a slight decrease in 2024, dropping to 512,2000 U.S. dollars from the peak of 521,500 U.S. dollars in 2022. This decline came after years of substantial price increases, with the average price surpassing 400,000 U.S. dollars for the first time in 2021. The recent cooling in the housing market reflects broader economic trends and changing consumer sentiment towards homeownership. Factors influencing home prices and affordability The rapid rise in home prices over the past few years has been driven by several factors, including historically low mortgage rates and increased demand during the COVID-19 pandemic. However, the market has since slowed down, with the number of home sales declining by over two million between 2021 and 2023. This decline can be attributed to rising mortgage rates and decreased affordability. The Housing Affordability Index hit a record low of 98.1 in 2023, indicating that the median-income family could no longer afford a median-priced home. Future outlook for the housing market Despite the recent cooling, experts forecast a potential recovery in the coming years. The Freddie Mac House Price Index showed a growth of 6.5 percent in 2023, which is still above the long-term average of 4.4 percent since 1990. However, homebuyer sentiment remains low across all age groups, with people aged 45 to 64 expressing the most pessimistic outlook. The median sales price of existing homes is expected to increase slightly until 2025, suggesting that affordability challenges may persist in the near future.

The homeownership rate was the highest among Americans in their early 70s and the lowest among people in their early 20s in 2023. In that year, approximately 81 percent of individuals aged 70 to 75 resided in a residence they owned, compared to approximately 23.6 percent among individuals under the age of 25. On average, 65.9 percent of Americans lived in an owner-occupied home. The homeownership rate was the highest in 2004 but has since declined.

In 2024, the average age of recent first-time buyers in London was slightly higher than the England average. Across the UK, first-time buyers accounted for approximately 290,000 home sales. First-time buyer prices and mortgages In London, the average value of a mortgage for first-time buyers was far higher than all other regions in the UK. Apart from the initial cost of a down payment, those that can afford to, see monthly payment savings against those renting. In certain parts of the country, annual savings of buying against renting saw first time buyers amounted to over two thousand British pounds. Help to buy To encourage first-time buyers, the UK government started the "Help to buy" scheme. The scheme sees people saving for a first-time home receive a 25% bonus to their savings when purchasing a house valued at 250,000 British pounds (450,000 British pounds in London). Between December 2015 and March 2018, the North West of England saw the highest number of Help to buy ISA bonuses paid.

The majority of home buyers in the United States in 2021 purchased homes that cost 500 thousand U.S. dollars or more. Homes over 500 thousand U.S. dollars were purchased by 22 percent of buyers from the 42 to 56 age group who made up the largest share of buyers in that category.

In the presented European countries, the homeownership rate extended from 42 percent in Switzerland to as much as 96 percent in Albania. Countries with more mature rental markets, such as France, Germany, the UK and Switzerland, tended to have a lower homeownership rate compared to the frontier countries, such as Lithuania or Slovakia. The share of house owners among the population of all 27 European countries has remained relatively stable over the past few years. Average cost of housing Countries with lower homeownership rates tend to have higher house prices. In 2023, the average transaction price for a house was notably higher in Western and Northern Europe than in Eastern and Southern Europe. In Austria - one of the most expensive European countries to buy a new dwelling in - the average price was three times higher than in Greece. Looking at house price growth, however, the most expensive markets recorded slower house price growth compared to the mid-priced markets. Housing supply With population numbers rising across Europe, the need for affordable housing continues. In 2023, European countries completed between one and six housing units per 1,000 citizens, with Ireland, Poland, and Denmark responsible heading the ranking. One of the major challenges for supplying the market with more affordable homes is the rising construction costs. In 2021 and 2022, housing construction costs escalated dramatically due to soaring inflation, which has had a significant effect on new supply.