The U.S. housing market has slowed, after ** consecutive years of rising home prices. In 2021, house prices surged by an unprecedented ** percent, marking the highest increase on record. However, the market has since cooled, with the Freddie Mac House Price Index showing more modest growth between 2022 and 2024. In 2024, home prices increased by *** percent. That was lower than the long-term average of *** percent since 1990. Impact of mortgage rates on homebuying The recent cooling in the housing market can be partly attributed to rising mortgage rates. After reaching a record low of **** percent in 2021, the average annual rate on a 30-year fixed-rate mortgage more than doubled in 2023. This significant increase has made homeownership less affordable for many potential buyers, contributing to a substantial decline in home sales. Despite these challenges, forecasts suggest a potential recovery in the coming years. How much does it cost to buy a house in the U.S.? In 2023, the median sales price of an existing single-family home reached a record high of over ******* U.S. dollars. Newly built homes were even pricier, despite a slight decline in the median sales price in 2023. Naturally, home prices continue to vary significantly across the country, with West Virginia being the most affordable state for homebuyers.

Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q2 2025 about sales, median, housing, and USA.

Graph and download economic data for Average Sales Price of Houses Sold for the United States (ASPUS) from Q1 1963 to Q2 2025 about sales, housing, and USA.

The number of home sales in the United States peaked in 2021 at almost ************* after steadily rising since 2018. Nevertheless, the market contracted in the following year, with transaction volumes falling to ***********. Home sales remained muted in 2024, with a mild increase expected in 2025 and 2026. A major factor driving this trend is the unprecedented increase in mortgage interest rates due to high inflation. How have U.S. home prices developed over time? The average sales price of new homes has also been rising since 2011. Buyer confidence seems to have recovered after the property crash, which has increased demand for homes and also the prices sellers are demanding for homes. At the same time, the affordability of U.S. homes has decreased. Both the number of existing and newly built homes sold has declined since the housing market boom during the coronavirus pandemic. Challenges in housing supply The number of housing units in the U.S. rose steadily between 1975 and 2005 but has remained fairly stable since then. Construction increased notably in the 1990s and early 2000s, with the number of construction starts steadily rising, before plummeting amid the infamous housing market crash. Housing starts slowly started to pick up in 2011, mirroring the economic recovery. In 2022, the supply of newly built homes plummeted again, as supply chain challenges following the COVID-19 pandemic and tariffs on essential construction materials such as steel and lumber led to prices soaring.

Graph and download economic data for All-Transactions House Price Index for the United States (USSTHPI) from Q1 1975 to Q2 2025 about appraisers, HPI, housing, price index, indexes, price, and USA.

Graph and download economic data for Housing Inventory: Median Days on Market in the United States (MEDDAYONMARUS) from Jul 2016 to Sep 2025 about median and USA.

United States Housing Market Index: sa: Single Family Detached: Present data was reported at 67.000 NA in Nov 2018. This records a decrease from the previous number of 74.000 NA for Oct 2018. United States Housing Market Index: sa: Single Family Detached: Present data is updated monthly, averaging 59.000 NA from Jan 1985 (Median) to Nov 2018, with 407 observations. The data reached an all-time high of 86.000 NA in Dec 1998 and a record low of 6.000 NA in Jan 2009. United States Housing Market Index: sa: Single Family Detached: Present data remains active status in CEIC and is reported by National Association of Home Builders. The data is categorized under Global Database’s United States – Table US.EB013: Housing Market Index.

The number of members of the National Association of Realtors (NAR) in 2023 declined for the first time since 2012. This trend also reflects the recovery of the property market after the financial crisis of 2007-2009, as the volume of home sales began to climb from 2011. The NAR is a North American trade association for real estate workers formed in 1908 and currently based in Chicago, Illinois. In 2022, the association had nearly *** million members.Employment in the real estate sector The upward in NRA membership is mirrored in overall employment in the real estate sector in the United States. In 2023, *** million people were employed in the sector, which indicates that the majority of workers are members of the NAR. Employees in the real estate, rental, and leasing industry in the U.S. earned slightly above the average wage in the country. Membership growth ties in with growth in home sales The growth in NAR membership also correlates with the growth of residential property sales. For instance, the number of new houses sold in the U.S. has been on the rise since 2011. American adults as a whole have been steady in their view that homeownership is an important part of the American Dream. However, the share of American Millennials – those born between 1981 and 1996 - who view homeownership as important has been fluctuating since 2010. This adds an element of uncertainty to the future of the housing market because millennials are in their mid-twenties and thirties, which is widely viewed as the best time to buy a home from a home equity perspective.

Context

Data augmentation for housing prices

Content

US Housing Data for 2008-2009 (pre crisis and crisis year) to predict housing prices more accurate

Inspiration

Housing price prediction competition on Kaggle

Graph and download economic data for All-Transactions House Price Index for San Diego-Chula Vista-Carlsbad, CA (MSA) (ATNHPIUS41740Q) from Q4 1975 to Q2 2025 about San Diego, appraisers, CA, HPI, housing, price index, indexes, price, and USA.

In 2024, approximately 51,000 cash home sales took place in the United States. Despite the number of cash transactions declining since the peak in 2021, it remained elevated compared to the long-term average. This can be attributed to the substantial increase in mortgage rates following the COVID-19 pandemic. Despite cash purchases growing in popularity, the majority of home purchases were financed with a conventional mortgage in 2024.

The Industrial Production Index (IPI) fell sharply in the United States during the Great Recession, reaching its lowest point in June 2009. The recession was triggered by the collapse of the U.S. housing market and the subsequent financial crisis in 2007 and 2008, during which a number of systemically critical financial institutions failed or came close to bankruptcy. The crisis in the financial sector quickly spread to the non-financial economy, where firms were adversely hit by the tightening of credit conditions and the drop in consumer confidence caused by the crisis. The largest monthly drop in the IPI came in September 2008, as Lehman Brothers collapsed and the U.S. government was forced to step in to backstop the financial sector. Industrial production would begin to recover in the Summer of 2009, but remained far below its pre-crisis levels.

United States CSI: Home Values: Next Yr: 75th Percentile data was reported at 5.200 % in May 2018. This records an increase from the previous number of 4.900 % for Apr 2018. United States CSI: Home Values: Next Yr: 75th Percentile data is updated monthly, averaging 3.200 % from Jan 2007 (Median) to May 2018, with 137 observations. The data reached an all-time high of 5.200 % in May 2018 and a record low of 0.200 % in Feb 2009. United States CSI: Home Values: Next Yr: 75th Percentile data remains active status in CEIC and is reported by University of Michigan. The data is categorized under Global Database’s USA – Table US.H036: Consumer Sentiment Index: Home Buying and Selling Conditions. The question was: What do you think will happen to the prices of homes like yours in your community over the next 12 months? Will they increase at a rapid rate, increase at a moderate rate, remain about the same, decrease ata moderate rate, or decrease at a rapid rate? By about what percent do you expect prices of homes like yours in your community to go (up/down), on average, over the next 12 months?

United States GDP: 2009p: saar: Sector: Gross Housing Value Added data was reported at 1,587.847 USD bn in Mar 2018. This records an increase from the previous number of 1,580.827 USD bn for Dec 2017. United States GDP: 2009p: saar: Sector: Gross Housing Value Added data is updated quarterly, averaging 690.788 USD bn from Mar 1947 (Median) to Mar 2018, with 285 observations. The data reached an all-time high of 1,587.847 USD bn in Mar 2018 and a record low of 126.931 USD bn in Mar 1947. United States GDP: 2009p: saar: Sector: Gross Housing Value Added data remains active status in CEIC and is reported by Bureau of Economic Analysis. The data is categorized under Global Database’s USA – Table US.A042: NIPA 2013: GDP by Sector: Value Added: Seasonally Adjusted at Annual Rates: 2009 Price: Chain Linked.

In 2021, close to ten percent of the ***** million homes in the United States were from the first decade of the 21st century. Between 2000 and 2009, approximately **** million homes were constructed.

United States PCE: saar: MB: SE: Housing data was reported at 1,680.681 USD bn in May 2013. This records an increase from the previous number of 1,676.387 USD bn for Apr 2013. United States PCE: saar: MB: SE: Housing data is updated monthly, averaging 978.537 USD bn from Jan 1987 (Median) to May 2013, with 317 observations. The data reached an all-time high of 1,680.681 USD bn in May 2013 and a record low of 441.209 USD bn in Jan 1987. United States PCE: saar: MB: SE: Housing data remains active status in CEIC and is reported by Bureau of Economic Analysis. The data is categorized under Global Database’s USA – Table US.A187: NIPA 2009: Personal Consumption Expenditure: Current Price: Market Based.

United States New 1 Family House for Sale: Median no of Month on Sales Market data was reported at 2.900 Month in Sep 2018. This stayed constant from the previous number of 2.900 Month for Aug 2018. United States New 1 Family House for Sale: Median no of Month on Sales Market data is updated monthly, averaging 4.700 Month from Jan 1963 (Median) to Sep 2018, with 669 observations. The data reached an all-time high of 14.000 Month in Dec 2009 and a record low of 2.700 Month in Jun 1971. United States New 1 Family House for Sale: Median no of Month on Sales Market data remains active status in CEIC and is reported by US Census Bureau. The data is categorized under Global Database’s United States – Table US.EB001: New One Family House Unit: Sold and For Sale.

United States FCI-G Index: House Prices data was reported at -0.053 Index in Mar 2025. This records a decrease from the previous number of -0.047 Index for Feb 2025. United States FCI-G Index: House Prices data is updated monthly, averaging -0.157 Index from Jan 1990 (Median) to Mar 2025, with 423 observations. The data reached an all-time high of 0.400 Index in Apr 2009 and a record low of -0.617 Index in May 2022. United States FCI-G Index: House Prices data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s United States – Table US.S021: Financial Conditions Impulse on Growth.

The foreclosure rate in the United States has experienced significant fluctuations over the past two decades, reaching its peak in 2010 at **** percent following the financial crisis. Since then, the rate has steadily declined, with a notable drop to **** percent in 2021 due to government interventions during the COVID-19 pandemic. In 2024, the rate stood slightly higher at **** percent but remained well below historical averages, indicating a relatively stable housing market. Impact of economic conditions on foreclosures The foreclosure rate is closely tied to broader economic trends and housing market conditions. During the aftermath of the 2008 financial crisis, the share of non-performing mortgage loans climbed significantly, with loans 90 to 180 days past due reaching *** percent. Since then, the share of seriously delinquent loans has dropped notably, demonstrating a substantial improvement in mortgage performance. Among other things, the improved mortgage performance has to do with changes in the mortgage approval process. Homebuyers are subject to much stricter lending standards, such as higher credit score requirements. These changes ensure that borrowers can meet their payment obligations and are at a lower risk of defaulting and losing their home. Challenges for potential homebuyers Despite the low foreclosure rates, potential homebuyers face significant challenges in the current market. Homebuyer sentiment worsened substantially in 2021 and remained low across all age groups through 2024, with the 45 to 64 age group expressing the most negative outlook. Factors contributing to this sentiment include high housing costs and various financial obligations. For instance, in 2023, ** percent of non-homeowners reported that student loan expenses hindered their ability to save for a down payment.

The Federal National Mortgage Association, commonly known as Fannie Mae, was created by the U.S. congress in 1938, in order to maintain liquidity and stability in the domestic mortgage market. The company is a government-sponsored enterprise (GSE), meaning that while it was a publicly traded company for most of its history, it was still supported by the federal government. While there is no legally binding guarantee of shares in GSEs or their securities, it is generally acknowledged that the U.S. government is highly unlikely to let these enterprises fail. Due to these implicit guarantees, GSEs are able to access financing at a reduced cost of interest. Fannie Mae's main activity is the purchasing of mortgage loans from their originators (banks, mortgage brokers etc.) and packaging them into mortgage-backed securities (MBS) in order to ease the access of U.S. homebuyers to housing credit. The early 2000s U.S. mortgage finance boom During the early 2000s, Fannie Mae was swept up in the U.S. housing boom which eventually led to the financial crisis of 2007-2008. The association's stated goal of increasing access of lower income families to housing finance coalesced with the interests of private mortgage lenders and Wall Street investment banks, who had become heavily reliant on the housing market to drive profits. Private lenders had begun to offer riskier mortgage loans in the early 2000s due to low interest rates in the wake of the "Dot Com" crash and their need to maintain profits through increasing the volume of loans on their books. The securitized products created by these private lenders did not maintain the standards which had traditionally been upheld by GSEs. Due to their market share being eaten into by private firms, however, the GSEs involved in the mortgage markets began to also lower their standards, resulting in a 'race to the bottom'. The fall of Fannie Mae The lowering of lending standards was a key factor in creating the housing bubble, as mortgages were now being offered to borrowers with little or no ability to repay the loans. Combined with fraudulent practices from credit ratings agencies, who rated the junk securities created from these mortgage loans as being of the highest standard, this led directly to the financial panic that erupted on Wall Street beginning in 2007. As the U.S. economy slowed down in 2006, mortgage delinquency rates began to spike. Fannie Mae's losses in the mortgage security market in 2006 and 2007, along with the losses of the related GSE 'Freddie Mac', had caused its share value to plummet, stoking fears that it may collapse. On September 7th 2008, Fannie Mae was taken into government conservatorship along with Freddie Mac, with their stocks being delisted from stock exchanges in 2010. This act was seen as an unprecedented direct intervention into the economy by the U.S. government, and a symbol of how far the U.S. housing market had fallen.