Data shows that the number of homes in the United States changing hands due to job transfers, retirement, or upgrading to larger living spaces has plummeted to the lowest point in nearly thirty years.
According to analysis by the online real estate brokerage Redfin, from January to September this year, only about 28 homes were sold per 1,000 households, marking the lowest turnover rate since at least the 1990s.
Home turnover rate refers to the number of homes sold divided by the total number of available properties for sale.
While sales data can reflect fluctuations in housing transactions during specific periods, a low turnover rate highlights the phenomenon of homeowners staying in their properties for longer periods without moving.
Of particular note, the home sales turnover rate in the first nine months of this year has dropped by about 30% compared to the average for the same period from 2012 to 2022.
Traditionally, new job opportunities or the need for more space due to expanding families would prompt homeowners to sell their properties and move. The decrease in housing transactions today indicates a reduction in people’s job mobility, or the inability to afford the dual costs of selling and buying properties due to current housing prices and mortgage rates.
Redfin’s chief economist Daryl Fairweather pointed out, “If people are struggling, it means the economy is in a rut. The current labor market shows low hiring and low layoffs, and I believe this is closely related to the above phenomenon.”
Data from the U.S. Department of Labor shows that in August, employers added only 22,000 jobs, a sharp decline from July’s 79,000, and far below economists’ expectations of 80,000.
Due to the government shutdown suspending the release of recruitment data, the Labor Department did not publish employment statistics for September. However, a survey by payroll services company ADP at the beginning of the month showed that the private sector shed 32,000 jobs in September.
Meanwhile, several major companies such as Microsoft, General Motors, Amazon, and Target have announced layoff plans.
The slowing job market is causing increasing concern among many American citizens, which is not a good sign for real estate sales.
Another factor suppressing home sales is that many homeowners purchased homes or refinanced at historically low mortgage rates between 2020 and 2021. In the current loan rate environment, they lack the motivation to sell their old homes and buy new ones.
Low rates fueled a housing boom in the early 2000s, but since 2022, mortgage rates have been climbing from historic lows, leading the U.S. housing market into a slump that year.
Last year, sales of existing homes in the United States dropped to the lowest point in nearly 30 years. Although last month saw mortgage rates fall and this week 30-year mortgage rates hit a more than one-year low, sales have picked up to the fastest pace since February, but home sales this year continue to lag.
While rate reductions may boost buyers’ purchasing power, after years of soaring house prices, borrowing costs remain high for most Americans, making it difficult to afford buying homes.
In the past six years, the median price of existing homes in the United States has risen by 53%.
(This article was referenced from the report by the Associated Press)