Only 2.5 Percent of Homes Changed Hands So Far in 2024, Lowest in 30 Years

The percentage of U.S. homes that have changed ownership so far this year is at a multi-decade low as high mortgage rates and home prices dampen the housing market, according to a recent report by real estate brokerage Redfin.

A lower rate is an indicator of a cold housing market. Compared to the pandemic-fueled home-buying boom in 2021, there were 37.5 percent fewer homes sold this year. Redfin attributes the low turnover rate to elevated mortgage rates, rising home prices, low supply, and the economic and political uncertainty of an election year.

"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," Redfin Senior Economist Elijah de la Campa said.

"Of the homes listed this year, many have gone stale because of the lack of demand—especially homes which needed a little extra work. 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."

Meanwhile, home prices have hit a "record high" this year, with buyer demand at a level that keeps pushing prices up, Redfin stated. Complicating the issue, housing inventory is down from the pre-pandemic period.

The housing market is also weakened due to the "wait-and-see approach" taken by many buyers and sellers amid concerns about a potential recession and the U.S. presidential election in November.

Phoenix has seen the highest home turnover this year, followed by Newark, New Jersey; Nashville, Tennesee; Tampa, Flordia, and Nassau County, New York—metros where homebuyers have the "biggest pool of options" at present, the brokerage said.

"Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks," he said.

Total housing inventory by the end of August was up by 22.7 percent from a year ago, according to NAR data. This implies that home buyers "are in a much-improved position to find the right home and at more favorable prices," Yun stated.

However, in areas where supply continues to remain limited, such as certain markets in the Northeast region, sellers will continue to have an advantage, he said.