Just 2.5% of U.S. Homes Changed Hands This Year, The Lowest Rate in Decades

Redfin reports that the U.S. home turnover rate is the lowest it's been in at least 30 years with just 25 of every 1,000 homes selling so far in 2024

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Just 25 out of every 1,000 U.S. homes changed hands in the first eight months of 2024, the lowest turnover rate in decades, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Redfin conducted an analysis of housing turnover by comparing the first eight months of 2024 across different metro areas, home and neighborhood types. The company is using turnover as a measure of housing availability; it indicates how often homes are sold in a given area.

Redfin’s analysis used data from between 2012-2024, but zooming out further, this year’s turnover rate is the lowest in at least the past 30 years. Existing home sales were similar in the early-mid 1990s, but the number of homes that existed was much smaller—meaning the turnover rate was higher.

There were 37.5% fewer homes sold this year than during the middle of the pandemic buying frenzy in 2021 (40 of every 1,000) and 31% fewer homes sold than during the last pre-pandemic year in 2019 (36 of every 1,000).

Homes are changing hands at historically low rates for a number of interconnected reasons, including:

• Elevated mortgage rates: More than three-quarters of mortgaged U.S. homeowners have secured a rate under 5%, well below the rates on offer this year, which peaked at 7.52% in April. This has prompted many homeowners to hold off on selling and buying another home using a higher rate, a phenomenon known as the “lock-in effect.” Rates fell to the low 6% range in August, but the drop has not yet resulted in a significant uptick in sales.
• Rising prices and low supply: U.S. home prices have hit record highs this year, with just enough buyer demand to keep prices consistently ticking up. While the number of homes on the market has increased from a year ago, there are far fewer homes listed for sale compared to pre-pandemic levels.
• Economic and political uncertainty: Many buyers and sellers have taken a wait-and-see approach this year amid talk of a possible recession and ahead of a closely fought U.S. Presidential election between two candidates with contrasting economic and housing policies. Many are also taking their time to better understand the new rules relating to real estate agent fees.

“Mortgage rates have already fallen more than one percentage point from their 2024 peak, but we have not yet seen a significant increase in the number of homes changing hands. Of the homes listed this year, many have gone stale because of the lack of demand—especially homes which needed a little extra work,” said Redfin Senior Economist Elijah de la Campa. “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.”

Listings are also at the lowest level in over a decade

The rate of homes being listed for sale also fell in the first eight months, to the lowest level since at least 2012, the earliest year with listings data available.

Just 32 out of every 1,000 homes were listed for sale in the first eight months of 2024. That rate is down 30% from before the pandemic in 2019 (46 listings per 1,000 homes) and 29% down from during the pandemic-driven buying spree in 2021 (45 listings per 1,000 homes).

Homes in suburban and rural areas change hands slightly more often than urban homes

Around 25 out of every 1,000 single family homes and condos/townhouses in suburban and rural areas sold in the first eight months of the year, a slightly higher clip than the roughly 24 out of every 1,000 homes which sold in urban areas.

Since 2019, the turnover rate for single family homes in suburban and rural areas dropped 32.9%, while condos/townhouses dropped 37.6%. In comparison, the turnover rate for single family homes in urban areas dropped 25.8%, while the rate for condos/townhouses fell 35.2%.

Looking at the change over just the past year, the turnover rate has fallen across all property types in all areas, with condos/townhouses seeing the biggest declines overall. This is because condo inventory increased nationwide, with sales falling due to rising HOA and insurance costs.

Homebuyers have the biggest pool of options in Phoenix and Newark, NJ

A number of Sun Belt cities and metros adjacent to New York led the list of major metros with the highest turnover rate, based on Redfin’s analysis of the 50 most-populous metros.

Phoenix saw the most turnover of the major metros, with 38 out of every 1,000 homes changing hands. It was followed by Newark, NJ (37 of every 1,000), Nashville, TN (36 of every 1,000) and Tampa, FL (35 of every 1,000).

Metro Areas With Highest Turnover

Those same three cities also topped the list in 2019—albeit in a slightly different order. Sun Belt metros like Phoenix and Nashville maintained relatively strong activity throughout the pandemic, as workers looked for affordable places to live and work from home. Commuter metros like Newark and Nassau County, NY continue to turn over at a higher rate due to the appeal of suburban living close to New York.

Every metro area saw at least 10% fewer homes change hands this year compared to 2019, but San Jose, CA recorded the smallest drop (-13.7%), followed by San Francisco (-18.1%) and Detroit (-14.6%), which also jumped to 10th on the list of major metros with the highest turnover.

Homes change hands least often in Los Angeles

California contains seven of the 10 metros with the lowest turnover levels in the first eight months of the year. Los Angeles had the lowest turnover rate of any metro Redfin analyzed, with only 15 out of every 1,000 homes changing hands this year.

Metro Areas With Lowest Turnover

That’s no surprise: California has historically had low housing turnover due to the state’s tax laws, especially proposition 13, which incentivizes homeowners to stay put by limiting property-tax increases.

Despite the lower turnover rate in California, the only major metros to see more homes change hands in 2024, compared to 2023, were the three Bay Area metros—San Jose (+13.1%), San Francisco (+3.5%) and Oakland (+1.6%).

Austin saw the biggest decrease in turnover rate from five years ago, recording 30 sales for every 1,000 homes this year, a 49% drop from 59 of every 1,000 in 2019.

To view the full report, including charts, additional metro level data and a detailed methodology, please visit: https://www.redfin.com/news/home-sales-turnover-2024/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240930067554/en/

Redfin Journalist Services:
Angela Cherry
press@redfin.com

Source: Redfin

Released September 30, 2024