Number of U.S. Home Sales Hit 30 Year Low in 2024

According to a recent Redfin report, only 25 out of every 1,000 U.S. homes changed ownership in the first eight months of 2024, marking the lowest housing turnover rate in 30 years. Redfin’s analysis, which focused on turnover as an indicator of housing availability, compared data across various metro areas, home types, and neighborhoods from 2012 to 2024. This year’s turnover rate is the lowest since at least the early 1990s. While home sales were similarly low back then, the housing stock was smaller, meaning the turnover rate was higher.

In 2024, there were 37.5% fewer homes sold compared to the pandemic buying surge in 2021 (40 out of every 1,000 homes) and 31% fewer than in 2019 (36 out of every 1,000 homes), the last pre-pandemic year. Several factors are contributing to this historically low turnover rate, including:

• High mortgage rates: Over 75% of U.S. homeowners with mortgages have locked in rates below 5%, far lower than the peak of 7.52% in April 2024. This has led to a “lock-in effect,” where homeowners are hesitant to sell and purchase a new home with a higher mortgage rate. While rates dropped to the low 6% range in August, it hasn’t yet resulted in a noticeable uptick in sales.
• Rising prices and limited supply: Home prices have reached record highs this year, supported by steady buyer demand. Although the number of homes on the market has increased compared to last year, it remains significantly below pre-pandemic levels.
• Economic and political uncertainty: With concerns about a potential recession and the upcoming U.S. Presidential election, many buyers and sellers have adopted a cautious approach. Additionally, the new rules around real estate agent fees are adding to the hesitancy.

Read the complete news on the source website - World Property Journal

Author: David Barley