U.S. Home Turnover Rate Hits 30-Year Low Amidst Economic Uncertainty
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 the housing market and broader economic mobility.
Between January and September of this year, approximately 28 out of every 1,000 homes were sold, according to a recent analysis by Redfin – the lowest turnover rate recorded since at least the 1990s. This rate, which measures homes sold divided by the total number of existing sellable properties, is about 30% lower than the average rate between 2012 and 2022. The decline in home sales can impact related industries, from furniture to landscaping.
Experts attribute the stagnation to a combination of factors, including a cooling job market and elevated mortgage rates. “It’s not healthy for the economy that people are staying put,” said Daryl Fairweather, chief economist at Redfin. Recent Labor Department data showed just 22,000 jobs were added in August, and while September’s figures were unavailable due to the government shutdown, a survey by ADP indicated a loss of 32,000 private sector jobs. Companies like Microsoft, General Motors, Amazon, and Target have also announced job cuts, further contributing to economic anxieties. You can find more information about current employment statistics on the Bureau of Labor Statistics website.
Adding to the challenge, many homeowners are reluctant to sell after securing historically low mortgage rates in 2020 and 2021. The U.S. housing market has been in a slump since 2022, when mortgage rates began to rise, and the median sales price of a previously occupied U.S. home has increased 53% over the past six years. While mortgage rates have recently eased, falling to their lowest level in over a year this week, borrowing costs remain high for many potential buyers. For more on understanding mortgage rate trends, visit the Federal Reserve Economic Data (FRED) website.
Officials are closely monitoring the situation, and further declines in the turnover rate could indicate continued economic stagnation.
