New Home SalesCENSUS
667K
U.S. Housing Market · 1995
U.S. Housing Market in 1995
Existing SalesNAR
3.85M
Median PriceNAR
$110,500
30Y MortgagePMMS
7.93%
In 1995, the U.S. housing market recorded existing-home sales averaged 3.85 million, new-construction sales of 667K, and a 30-year fixed mortgage rate of 7.93%.
Existing-home sales fell 3.0% from 1994. the median existing-home price rose 3.1% to $110,500. the 30-year fixed mortgage fell 0.45 percentage points to 7.93%.
By the numbers — 1995: new-home sales 667K, existing-home sales 3.85M, median existing price $110,500, 30-year mortgage rate 7.93%.
Macroeconomic Context
After the Federal Reserve's aggressive 1994 tightening cycle pushed mortgage rates above 9 percent, 1995 brought welcome relief. The Fed held rates steady through most of the year and then cut the federal funds rate three times — in July, December, and again in January 1996 — as economic growth moderated to roughly 2.7 percent and policymakers grew confident that inflation, running around 2.8 percent, was well contained.
The bond market responded quickly. The 10-year Treasury yield, which had spiked in 1994, fell sharply through 1995, pulling mortgage rates down from their November 1994 peak. By year-end, the 30-year fixed rate had retreated into the mid-7-percent range, restoring a meaningful share of the affordability lost during the prior year's shock.
Broader economic conditions remained healthy. The labor market was improving, consumer confidence was rising, and the Republican-led Congress that arrived after the 1994 midterm elections was negotiating deficit-reduction legislation with the Clinton White House — a combination that kept long-term interest rates on a downward trajectory. The Oklahoma City bombing in April cast a pall over the national mood for a period, but its economic impact was localized.
For housing, 1995 was a year of recalibration. Buyers who had retreated in late 1994 began returning as rates fell, and both new and existing-home sales firmed through the second half. The modest median price appreciation of the year reflected a market finding its footing after the rate shock — setting the stage for the stronger gains that would materialize during the late-1990s expansion.