The U.S. housing market has remained stagnant, with just 25 out of every 1,000 homes changing hands in 2024, according to recent data from real estate firm Redfin.
The first eight months of the year marked the lowest turnover rate in at least 30 years, according to Redfin, which conducted an analysis of housing turnover by comparing the first eight months of 2024 across different metro areas, home and neighborhood types. It is using turnover as a way to measure housing availability.
Comparatively, there were 37% fewer homes sold this year compared with during the middle of the COVID-19 pandemic buying frenzy. In 2021, 40 of every 1,000 homes changed hands. There were also 31% fewer homes sold compared with 2019, Redfin data showed.
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Elevated mortgage rates and record-high home prices with just enough demand to keep pushing prices up have sidelined potential buyers and sellers, creating this low turnover, according to Redfin economists.
Even though there is more inventory compared to a year ago, the firm said there are still far fewer homes listed for sale compared to pre-pandemic levels.
On top of that, many buyers and sellers are holding off due to the economic and political uncertainty. They are taking a "wait-and-see approach" amid discussions of a potential recession and an intense presidential election between two candidates with contrasting economic and housing policies, Redfin said.
The turnover rate has fallen across all property types in all areas over the past year, though condos and townhouses had the biggest declines, according to Redfin.
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Scott Harris, associate broker at The Harris Residential Team, told FOX Business that the market is still "stuck" given that "it takes time to get a market back to health" for both buyers and sellers.
The good news for buyers is that lower mortgage rates "have buyers very enthusiastic," according to Harris.
But sellers, especially those seeking to buy right away, are facing a much different situation as more than 60% of outstanding mortgages are below 4%, according to Harris.
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Sellers were afraid to lose the low rate they locked in and had been "afraid to upgrade or downsize into an environment where mortgages were over 7%."
However, with rates slowly falling, Harris said the market is finally returning to an "environment where it's started to look interesting again for these sellers."
