(NewsNation) — House sales reached a historically low rate this year as high mortgage costs, low supply and political uncertainty stifle turnover.
About 2.5% of U.S. homes changed hands in the first eight months of 2024, according to a new Redfin report. It’s the lowest turnover rate in at least the past 30 years. Home sales were similar in the 1990s, but fewer homes meant turnover was higher.
So far, 37.5% fewer homes have sold in 2024 compared to the midpandemic “buying frenzy” in 2021, according to the report. That’s also 31% fewer than homes sold prepandemic in 2019.
It’s not just sales that are down, however. Sellers are also listing fewer homes. Both sales and listings are down at least 30% from 2019, according to the report. California metros had the least turnover while the Sun Belt and New York commuter regions saw the most.
What’s contributing to the decline?
Higher mortgage rates, rising prices, low supply and economic and political uncertainty are hampering home sales, according to Redfin.
More than three-quarters of U.S. homeowners with a mortgage have a rate less than 5%. That’s created a “lock-in effect” that’s made homeowners hesitant to sell and buy another property at a higher rate. Although mortgage rates fell to about 6% in August, sales mostly remained stagnant.
That’s partially because home prices hit record highs this year. The market has seen just enough demand to keep prices climbing.
Many buyers are also waiting out a rumored looming recession as a contentious presidential election draws near, Redfin’s findings suggest.
Where are homes selling the most?
Every metro area saw at least 10% fewer homes change hands this year compared to 2019. But suburban and rural homes sold more than those in urban areas, Redfin reported.
About 25 of every 1,000 single-family homes in suburban and rural areas sold in the first eight months of 2024. That’s slightly more than the 24 out of 1,000 homes that sold in urban areas.
Homes in Phoenix; Newark, New Jersey; Nashville, Tennessee; Tampa, Florida; and Nassau County, New York have seen the highest turnover rates so far this year.
Where are homes selling the least?
Los Angeles; Boston; San Francisco; Oakland, California; and Anaheim, California have seen the least turnover this year.
California has seen historically low turnover, and its state tax laws are partially to blame. The Golden State’s limited property tax hikes incentivize homeowners to stay put.
Still, San Jose, San Francisco and Oakland each saw more home sales this year compared to 2023.
Meanwhile, Austin, Texas, saw the biggest decrease in turnover rate from five years ago, with 30 sales for every 1,000 homes.