According to a recent Redfin analysis, the housing market is witnessing its lowest turnover rate in decades, which suggests that mortgage rates and home prices may still be too expensive to persuade buyers to get off the sidelines.
Only 2.5 percent of all US properties changed hands in 2024, according to the real estate listings website, through August. Comparing the present housing climate to the early to mid-1990s, the business stated that this is the lowest turnover rate for any first-eight-month period in at least 30 years.
The survey also stated that although the total supply of homes was greater during that time, home sales were at similar levels, indicating a higher turnover rate.
Los Angeles real estate transactions have been the slowest of the year, with only 15.2 sales for every 1,000 dwellings in the city. Following closely behind, with 15.6 and 16.6 sales per 1,000 residences, respectively, were Boston and San Francisco.
Additionally, the percentage of houses up for sale has fallen to its lowest point in more than ten years. According to the analysis, in the first eight months of the year, 32 out of every 1,000 residences in the US were listed, which is the lowest number for the time since at least 2012.
According to the firm, buyers are still reluctant to enter the market, probably as a result of the high mortgage rates and housing prices that persist as well as the unpredictability of the political and economic landscape.
Although they have decreased recently, mortgage rates are still much higher than they were during the pandemic. Freddie Mac data indicates that during the past week, the 30-year fixed rate was approximately 6.08%.
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Since most homeowners who have a mortgage have a rate less than 6%, there is still an imbalance between supply and demand in the market, which contributed to the US home price record set in July.
The majority of home economists predict that in the upcoming months, mortgage rates would decline somewhat but not significantly. Redfin had previously predicted that the 30-year fixed rate would exceed 6% by the end of 2024. By year’s end, home sales might reach 4.3 million, up 5% from the previous year’s figures, it continued.
