Affordability remains a chief concern in Louisiana’s housing market for 2025
Sales fell last year, but low inventory is keeping prices high
Housing availability showed some late signs of improvement in Louisiana in 2024, but overall stress continues to persist for would-be buyers with a lack of affordability and uncertainty around interest rates and insurance premiums, according to market data and industry insiders.
Last year began with inventory on the rise and average mortgage rates falling from a 24-year high of around 8% in October 2023 to roughly 6.4% in January 2024, according to Freddie Mac. However, a strong U.S. economy continued to place upward pressure on mortgage rates, affecting housing affordability.
The Louisiana Realtors Association summarized the market activity in its 2024 annual analysis published Monday, noting mortgage rates climbed back up above 7% in April and remained elevated through the spring and summer, causing buyers to pull back during the months that are usually the most active for the real estate market.
By September, the Federal Reserve began cutting benchmark rates, lowering the cost of borrowing and drawing some prospective home buyers back to the market. This led home sales to pick back up in the fourth quarter, but it wasn’t quite enough to make up for the mid-year slump.
Data from Louisiana Realtors indicates the total number of homes sold statewide in 2024 was 38,450, a 2.6% drop from the previous year. Still, the median sales price of those homes was 2.1% higher, returning to its 2022 level of $245,000.
Housing costs across the nation began to skyrocket in 2021 and 2022, driven largely by low inventory, low interest rates and high pandemic-era rent prices. Current listing prices remain high in large part because of the lack of supply and the general “stickiness” of home values that prevents them from falling.
“Housing values rarely actually go down,” said Alí Bustamante, an economist with the University of New Orleans who leads its Institute for Economic Development & Real Estate Research.
Measurements of the housing inventory in Louisiana, including both the number of homes available for sale and the number of months it would take to sell all the homes listed on the market, fell slightly from 2023.
Oji Alexander, a developer who runs one of New Orleans’ largest affordable housing nonprofits, People’s Housing+, said low inventory combined with high interest rates and record high property insurance premiums are hampering affordability.
Other big factors affect housing affordability in Louisiana, said Monique Blossom, a policy director for the Louisiana Fair Housing Action Center. They include its poverty rate and income inequality, both of which are among the highest in the country. Almost 19% of Louisiana residents reported income below $31,200, the federal poverty line for a family of four last year.
