The housing market is heading into 2025 with a worrisome supply trend.

There is good news to close out 2024 in the housing market: There is too much supply. Bad news: Much of this supply is stale, sitting unsold longer than usual.

According to a new report from Redfin, active listings in November were up 12.1 percent from November 2023 and reached the highest level since 2020.

More than half (54.5%) of these homes, however, sat on the market for at least 60 days without going under contract to sell. That’s the highest share for any November since 2019 and up nearly 50 percent from last year, according to the report.

The average home that went under contract did so in 43 days, according to Redfin, the slowest November pace since 2019.

“A lot of listings on the market are either stale or unlivable. There’s a lot of inventory, but it doesn’t feel like enough,” said Redfin agent Mam Loggins, who was quoted in the report. “I explain to sellers that if they’re not priced right, their house will sit on the market. Houses that are priced well and in good condition fly off the market in three to five days, but overpriced. The houses can sit for more than three months.”

Mortgage rates topped 7 percent in October and stayed there for most of the year, according to him Mortgage news daily. House prices continue to rise. S&P CoreLogic Case-Shiller’s latest monthly price report, released Tuesday, showed prices nationally rose 3.6% in October from the same month a year ago.

“With the latest data covering the pre-election period, our national index has shown continued improvement,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “De-risking political uncertainty has boosted equity markets; it will be telling if the same sentiment resonates with homeowners.”

According to the National Association of Realtors, pending home sales, a measure of contracts signed to purchase existing homes, rose to the highest level in nearly two years in November, both monthly and annually. However, they were coming on a very slow basis. Realtors claim that interest rates are now at a new normal.

“Consumers have reset expectations regarding mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yoon. “Mortgage rates have averaged more than 6% over the past 24 months. Buyers are no longer waiting or expecting mortgage rates to drop significantly. Additionally, buyers are in a better position to negotiate.” are because the market deviates from the seller’s market.”

However, a slow sales pace does not bode well for the new year, especially with rising interest rates. There’s still demand, but according to another Redfin report, renters are staying renters longer, not just because of higher home prices but also because of higher prices for brokers and movers.

According to a year-end report from CoreLogic, the seller lock-in effect, where some sellers don’t want to trade up to pass on their lower mortgage rates, eased in 2024, but that’s likely to last most of the lifetime. was due to the events of or the need to tap accumulated equity. The added inventory didn’t move the needle much on sales, as costs stood in the way.

“Buyers are struggling to keep pace with home prices. Now the cost of owning a home, when adjusted for inflation, is at its highest point in decades. The continued rise has created a challenging environment for both first-time buyers and those looking to move up the property ladder,” CoreLogic chief economist Selma Heap wrote in the report.