The US housing market isn't just slow - it's at a historic standstill.
About 28 out of every 1,000 homes changed hands between January and September, according to Redfin. That's the lowest home turnover rate going back to at least the 1990s.
The turnover rate is down about 30% from the average between 2012 and 2022. Fewer homes changing hands means Americans are staying put longer than they have in decades.
"It's not healthy for the economy that people are staying put," said Daryl Fairweather, chief economist at Redfin. "If people are stuck, it's reflective of how the economy is stuck."
Traditionally, people sell and relocate for opportunities - new jobs, growing families needing more space, retirement moves. The fact that so few homes are changing hands suggests those opportunities aren't materializing.
The labor market is a big part of the problem. US employers added just 22,000 jobs in August, down from 79,000 in July and well below the 80,000 economists expected. In September, payroll company ADP showed the private sector actually lost 32,000 jobs.
Government hiring data has been on hold during the shutdown, so official September numbers were never released. But the trend is clear - hiring has slowed dramatically.
"We're in a low-hire, low-fire labor market and I think that this goes hand in hand with that," Fairweather said. Major companies including Microsoft, General Motors, Amazon, and Target have all announced job cuts recently.
When job opportunities dry up, people don't relocate for work. And when they're worried about keeping their current job, they definitely don't take on the financial risk of moving.
Many homeowners who bought or refinanced at rock-bottom rates in 2020-2021 have little incentive to sell. Why give up a 3% mortgage to buy a similar home with a 6.30% rate?
The average 30-year mortgage rate fell this week to its lowest level in over a year. But "lowest in a year" still means above 6%, which is dramatically higher than the 2-3% rates millions of homeowners currently enjoy.
Even with rates improving, borrowing costs remain too high for many Americans. Especially when combined with home prices that have risen 53% over the past six years.
Low home turnover signals economic stagnation. When people don't move, it creates ripple effects:
Workers can't relocate for better job opportunities. Families stay in homes that no longer fit their needs. Retirees delay downsizing. Young buyers can't find starter homes because existing owners won't sell.
The housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied homes sank last year to their lowest level in nearly 30 years.
This year has been sluggish too, though sales accelerated last month to their fastest pace since February as mortgage rates eased. But one decent month doesn't reverse years of decline.
The record-low home turnover rate captures how stuck the American housing market has become.
When only 28 of every 1,000 homes change hands over nine months, that's not a healthy market - it's a frozen one. The 30% decline from historical averages shows just how abnormal current conditions are.
Fairweather's warning that this reflects a "stuck economy" is important. Housing isn't isolated - it's connected to employment, consumer confidence, and economic mobility. When people can't or won't move, it limits economic dynamism.
The weak labor market makes everything worse. Why move for a new job when there aren't many jobs to move for? Why take on moving costs and a higher mortgage rate when your current job feels insecure?
Lower mortgage rates will help eventually. But they need to drop much further to unlock the millions of homeowners stuck with 3% rates. Until rates approach those levels, or until home prices adjust downward significantly, expect the turnover rate to stay depressed.
A housing market where people stay put for decades isn't normal or healthy. But that's exactly where America finds itself - at the lowest turnover rate in at least 30 years, with no quick fix in sight.
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