Within the first eight months of this year, only 2.5% of homes in the United States changed owners, which marks the lowest turnover rate in the last 30 years.
According to a new data analysis from real estate company Redfin, only 2.5% of homes throughout the United States have “changed hands” within the first eight months of this year. This data marks the lowest turnover rate in at least 30 years.
This newest data emphasizes how much the real estate industry and housing market has stalled in the US in 2024. Within the year so far, America experienced record breaking highs when it came to home pricing, as well as an elevation of mortgage rates that have “created one of the most unaffordable housing markets in a generation,” wrote Samantha Delouya for CNN.
“What this data tells us is that the housing market in 2024 has been really frozen,” said Chen Zhao, Redfin’s economic research lead.
“We said the same thing in 2023 and I think there was this expectation that it couldn’t get any worse, but 2024 has been disappointing for the housing market.”
According to Redfin’s report, around 25 out of every 1,000 homes were sold during the first eight months of 2024. When compared to the same period in 2021, when home buying was on the rise from the initial aftermath of the pandemic, 37% fewer homes were sold.
Zhao stated that in order for the real estate industry to seem back on track, the data would have to reflect a market where 30 to 40 of every 1,000 homes change owners.
Redfin reported that one trend that was also observed was homes in rural and suburban areas sold more often than those in urban areas. They also reported that seven out of the 10 metro areas with the lowest turnover levels are in the state of California. Los Angeles had the lowest turnover rate of any metropolitan area.
“In a place like Los Angeles, wages aren’t keeping up with housing prices. There is not that much new construction inventory hitting the market, and when it does, it’s not at entry-level prices,” said Jeremiah Vancans, a Los Angeles-based Realtor with Compass.
“The cost of construction is so high that building and then offering something below $1 million is hard to do.”
“I see a lot of entertainment workers out of work, and they haven’t been working for years. Their money is starting to dry up,” Vancans said of the slowdown in Los Angeles.
“Homebuyers in Sun Belt cities and areas within commuting distance to New York City had the biggest pool of options. More homes changed hands in Phoenix than any other metro area,” Redfin reported.
“We have been building a lot of new homes, which is giving us a higher supply of homes for buyers to choose from, and, compared to some other parts of the country, homes in Phoenix are more affordable,” said Patrick Chamberlin, a Phoenix-based Realtor.
“We’re still low from what we were used to over the last couple of years. It still feels sluggish,” he said.
“There has been very little incentive for people to sell homes. That very low inventory on the market was one of the primary drivers of there being so little turnover,” Zhao said.
“Getting to a healthy housing market is very hard from this point. I think the answer is either some variation of, you need a huge amount of supply right to come on, whether that’s new construction, or we somehow unlock existing homeowners.”
“It may be a five-to-10-year-long slog before you get back to a housing market that starts to resemble what we’ve had in the past,” she added.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
