The US housing market has stalled, with only 2.5% of homes listed sold in the first eight months of 2024. It has the lowest turnover rate recorded in three decades, according to a report.
So far this year, home prices have risen to record highs. As of August, the median sale price of a typical home was $434,050, marking a 3.2% increase from home prices in the same month in 2023.
Additionally, mortgage rates remained elevated, though they fell significantly from a previous high of 8% in October 2023. In the week ending Sept. 26, the interest rate for a 30-year mortgage loan was 6.08%, per Freddie Mac.
These conditions led to one of the most unaffordable housing markets in US history. Many American buyers were pushed to the sidelines, leading home sales to lag. In fact, only 25 in 1,000 homes were sold between January and August 2024, per a new analysis from Redfin.
That is 27% fewer homes sold in the same months in 2021. It is also 31% lower than the same period in 2019.
What Is a Healthy Housing Market?
A healthy housing market would see 30 to 40 of every 1,000 homes sold, according to Redfin's economic research lead Chen Zhao.
That said, one of the main reasons for the lagging sales is that there is a shortage of homes listed. Between January and August, only 32 out of every 1,000 homes in the US were listed for sale. That is the lowest level recorded since 2012, the report noted.
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To add more supply to the market, mortgage rates would likely need to fall further to push homeowners locked into low mortgages to sell.
"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," Redfin Senior Economist Elijah de la Campa said in the report.
Where Were the Lowest Turnover Rates in 2024?
The analysis found that homes in suburban and rural areas sold slightly more than properties found in urban areas. Of the five metro areas with the lowest turnover rates so far this year, four were in California.
Of all cities, Los Angeles had the worst sales in the first eight months of the year, with only 15.2 of every 1,000 homes changing hands. That is 32% lower than in 2019
Other cities with the worst sales include Boston in Massachusetts; and San Francisco, Oakland, and Anaheim in California.
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