Sales of existing homes in the US fell last year to the lowest level in almost three decades as sky-high home prices and elevated mortgage rates squeezed home buyers.Sales of previously owned homes, which make up the vast majority of the market, totaled 4.06 million in 2024, the National Association of Realtors said Friday. Thats the lowest level since 1995 and slightly below 2023s similarly anemic levels.The average rate on a conventional, 30-year fixed mortgage reached a peak of 7.22% last year. After briefly slipping to nearly 6%, it has ratcheted up in recent weeks, reaching 7.04% last week and ticking down to 6.96% this week, according to Freddie Mac.The median price of an existing home, meanwhile, has climbed for 18 months straight, reaching a record high of $407,500 in 2024. In December, the median price was $404,400.Despite the tough conditions for buyers, there was some momentum toward the end of 2024, with existing-home sales rising 2.2% in December from the prior month to a seasonally adjusted annual rate of 4.24 million, the fastest pace since February 2024.Home sales in the final months of the year showed solid recovery despite elevated mortgage rates, said NAR chief economist Lawrence Yun in a release. Consumers clearly understand the long-term benefits of homeownership. Job and wage gains, along with increased inventory, are positively impacting the market.Not much relief aheadThe US housing market might not improve much for buyers this year.Mortgage rates are expected to remain above 6% through 2026. Mortgage rates were also high in the 1980s, but home prices were much lower back then. Buyers nowadays are contending with home prices that continue to hover near unprecedented highs.In some markets, homeowners are also facing skyrocketing home insurance premiums, which are not expected to change this year.Another longstanding issue for housing affordability is a persistent lack of homes on the market. Total housing inventory improved throughout 2024, but supply isnt anywhere close to keeping up with demand.There is a housing shortage of 3.7 million units, according to a recent Freddie Mac estimate. In December, inventory stood at 1.15 million units, down 13.5% from November but up 16.2% from a year earlier.One big reason for the undersupply is the so-called lock-in effect, where some homeowners who locked in a low mortgage rate before the Federal Reserve began to hike interest rates in 2022 prefer to not sell, as they would need to take on a mortgage with a much higher rate if they bought another home.However, some did sell last year because of life events such as marriage, divorce or new children, contributing to last years steady uptick in housing inventory. The problem for this year is that homeowners dont have much of an incentive to sell.High borrowing costs also weighed on homebuilding last year, but theres a sense of optimism among builders that deregulation could boost the supply of homes this year, according to the National Association of Home Builders.Scott Turner, who is President Donald Trumps pick to helm the US Department of Housing and Urban Development, said during his confirmation hearing on Capitol Hill that hes committed to reviewing and cutting down on regulation. Since the Fed is expected to cut interest rates only a few times this year, deregulation could play a role in easing pressure in the housing market.But slashing regulations would likely not be enough to offset some of the Trump administrations promises of tariffs and mass deportations, which could add to the cost of building new homes.