Amid mortgage rates near 7%, few homeowners in the U.S. are selling their homes.
Out of every 1,000 homes in the U.S., only 14 changed hands over the first six months of this year, or 1.4%, according to data released Tuesday from real-estate brokerage Redfin RDFN, -2.57%. Before the pandemic in 2019, roughly 19 out of every 1,000 homes, or 1.9%, changed hands.
In other words, “just 1% of the nation’s homes have changed hands this year,” Redfin said, of the 1.4% figure, which is “the lowest share in at least a decade.”
Home listings per 1,000 properties have fallen to the lowest level since 2012.
Redfin
Redfin has tracked turnover as a measure of housing availability since 2012. Instead of looking at how many listings there are — or tracking inventory — this data looks at how often homes change hands.
In recent years, more households were formed than single-family homes constructed to house them. The shortfall increased to 6.5 million in 2022 from 5.24 million in 2021, Realtor.com said. (Realtor.com is operated by News Corp. NWSA, +0.86% subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.)
The pandemic-era monetary policies that pushed mortgage rates to historic lows created an unforeseen consequence: A surge in rates has caused a lock-in effect that is preventing homeowners from selling their current homes. That has “depleted already low inventory levels,” Redfin said.
“A surge in rates has caused a lock-in effect that is preventing homeowners from selling their current homes.”
The local housing market where the fewest homes have changed hands this year is the San Francisco Bay Area, according to Redfin.
The company found that year to date, only six out of every 1,000 homes in San Jose, for example, have been turned over to a new owner. Home prices in the metro area are among the highest in the nation. The median price of a home in San Jose was $ 1.3 million, according to Zillow Z, +1.10%.
The turnover rate was similarly very low in other California cities, Redfin said, including Oakland, San Diego and Los Angeles. “California has the slimmest pickings of any U.S. state,” the company said.
Part of the reason for the low turnover is due to the state’s unique property-tax law.
“California historically has the lowest housing turnover because the state’s tax laws — namely Proposition 13 — incentivizes homeowners to stay put by limiting property-tax increases,” Redfin explained.
“Today’s elevated mortgage rates intensify that by giving homeowners two financial incentives to stay put: Low property taxes and comparatively low mortgage rates,” the report added.
Across the country, homes in Newark, N.J., are changing hands more briskly, Redfin said. In Newark, 24 of every 1,000 homes changed hands during the first half of 2023. Newark was followed by Nashville, Tenn., and Austin, Texas.
Home prices in these areas were also lower, with the average price of a home in Newark being only around $ 420,000, according to Zillow, compared to almost $ 349,000 nationwide.