Only 2.5 Percent of Homes Changed Hands so Far in 2024, Lowest in 30 Years

Homes await buyers in Irvine, Calif., on Sept. 21, 2020. John Fredricks/The Epoch Times

The percentage of U.S. homes that have changed ownership so far this year is at a multi-decade low as high mortgage rates and home prices dampen the housing market, according to a recent report by real estate brokerage Redfin.

In the first eight months of 2024, only 25 out of every 1,000 homes in the United States changed hands, according to the Sept. 30 report. The 2.5 percent home turnover rate is the lowest in at least 30 years.

A lower rate is an indicator of a cold housing market. Compared to the pandemic-fueled home-buying boom in 2021, there were 37.5 percent fewer homes sold this year. Redfin attributes the low turnover rate to elevated mortgage rates, rising home prices, low supply, and the economic and political uncertainty of an election year.

The weekly average mortgage rate for a 30-year, fixed-rate mortgage was 6.08 percent for the week that ended on Sept. 26, up from 2.88 percent roughly three years ago. More than three-quarters of U.S. homeowners with mortgaged properties have secured a rate below 5 percent, Redfin noted. This is discouraging homeowners from selling as they might have to buy another home at a higher rate after the sale.

“Mortgage rates have already fallen more than 1 percentage point from their 2024 peak, but we have not yet seen a significant increase in the number of homes changing hands,” Redfin senior economist Elijah de la Campa said.

“Of the homes listed this year, many have gone stale because of the lack of demand—especially homes which needed a little extra work. With the majority of homeowners locked into low mortgages, rates will need to keep falling consistently for many to feel comfortable moving on from the deals they secured years ago.”

Meanwhile, home prices have hit a “record high” this year, with buyer demand at a level that keeps pushing prices up, Redfin stated. Complicating the issue, housing inventory is down from the pre-pandemic period.

The housing market is also weakened by the “wait-and-see approach” taken by many buyers and sellers amid concerns about a potential recession and the U.S. presidential election in November.

Phoenix has seen the highest home turnover this year, followed by Newark, New Jersey; Nashville, Tennessee; Tampa, Florida; and Nassau County, New York—metros where homebuyers have the “biggest pool of options” at present, according to the brokerage.

Los Angeles had the lowest turnover, followed by Boston; San Francisco; Oakland, California; and Anaheim, California.

Housing Market

With the rate on a 30-year, fixed-rate mortgage more than 1.5 percent lower than the peak in late October 2023, interest among homebuyers is rising. According to the Mortgage Bankers Association, mortgage loan applications rose for the week that ended on Sept. 20 from the previous week.

“As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply,” said Joel Kan, MBA’s vice president and deputy chief economist.

Sam Khater, chief economist for the Federal Home Loan Mortgage Corporation, or Freddie Mac, noted that the downward trajectory of mortgage rates is boosting refinance activity, “creating opportunities for many homeowners to trim their monthly mortgage payment.”

“Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks,” he said.

Lawrence Yun, chief economist at the National Association of Realtors, said that while home sales in August were “disappointing,” lower mortgage rates combined with rising inventory will create an environment for home sales to move higher over the coming months.

Total housing inventory by the end of August was up by 22.7 percent from a year ago, according to NAR data. This implies that home buyers “are in a much-improved position to find the right home and at more favorable prices,” according to Yun.

However, in areas where supply continues to remain limited, such as certain markets in the Northeast region, sellers will continue to have an advantage, he said.