U.S. Home Turnover Rate Hits 30-Year Low as Economic Uncertainty Persists
The rate at which U.S. homes are sold and change hands has fallen to its lowest level in nearly three decades, signaling a significant slowdown in residential real estate activity and potentially broader economic stagnation.
Between January and September of this year, approximately 28 out of every 1,000 homes were sold, according to a recent analysis. This marks the lowest U.S. home turnover rate since at least the 1990s, a decline of roughly 30% compared to the average rate between 2012 and 2022. The trend suggests homeowners are increasingly reluctant to sell, impacting housing supply and affordability. “It’s not healthy for the economy that people are staying put,” said Daryl Fairweather, chief economist at Redfin.
Several factors are contributing to this trend, including a cooling job market and elevated mortgage rates. U.S. employers added just 22,000 jobs in August, and while mortgage rates have recently eased – falling this week to their lowest level in over a year – they remain high enough to deter many potential buyers. Many homeowners are also locked in with historically low rates secured in 2020 and 2021, creating a disincentive to sell. You can find more information about current mortgage rate trends on the Federal Reserve Economic Data website.
The U.S. housing market has been in a slump since 2022, coinciding with the rise in mortgage rates after a period of historic lows. While sales saw a slight acceleration last month, reaching their fastest pace since February, the median sales price of a previously occupied U.S. home has still risen 53% over the past six years, exacerbating affordability challenges. This situation is further complicated by recent job cuts announced by major companies like Microsoft, Amazon, and General Motors, as reported in our previous coverage of the national job market.
Economists anticipate continued monitoring of job market data and mortgage rate fluctuations to assess the potential for a rebound in home sales in the coming months.
