A mere 28 out of every 1,000 homes changed hands this year, which covers 2.77% of the national housing inventory. That is down slightly from last year’s 2.78% share, and it is the lowest turnover rate in at least 30 years.
According to a data report from Redfin, the low turnover rate can be attributed to elevated home prices, onerous borrowing costs, and sellers unwilling to jettison the low mortgage rates they enjoy on their homes – more than 70% of mortgaged homeowners have a rate below 5%. Ongoing economic uncertainty has further exacerbated the market, resulting in a 3.9% share of homes being listed for sale in the first nine months of the year, or 39 out of every 1,000 homes, the third slowest rate on record.
“America’s housing market is defined right now by caution,” said Chen Zhao, Redfin’s head of economics research. “Buyers are walking away from deals more often, sometimes due to affordability issues and sometimes because they’re re-evaluating whether now is the right moment to commit. Others aren’t even shopping, waiting instead for prices or mortgage rates to come down. On the other side, many sellers are staying put—either because they’re locked into low rates or unwilling to accept offers below expectations. When both sides hesitate, sales naturally fall to historic lows.”
