Residential Real Estate News
Number of U.S. Home Sales Hit 30 Year Low in 2024
31 percent fewer U.S. homes sold in 2024 than in prepandemic 2019
According to a recent Redfin report, only 25 out of every 1,000 U.S. homes changed ownership in the first eight months of 2024, marking the lowest housing turnover rate in 30 years. Redfin's analysis, which focused on turnover as an indicator of housing availability, compared data across various metro areas, home types, and neighborhoods from 2012 to 2024. This year's turnover rate is the lowest since at least the early 1990s. While home sales were similarly low back then, the housing stock was smaller, meaning the turnover rate was higher.
In 2024, there were 37.5% fewer homes sold compared to the pandemic buying surge in 2021 (40 out of every 1,000 homes) and 31% fewer than in 2019 (36 out of every 1,000 homes), the last pre-pandemic year. Several factors are contributing to this historically low turnover rate, including:
- High mortgage rates: Over 75% of U.S. homeowners with mortgages have locked in rates below 5%, far lower than the peak of 7.52% in April 2024. This has led to a "lock-in effect," where homeowners are hesitant to sell and purchase a new home with a higher mortgage rate. While rates dropped to the low 6% range in August, it hasn't yet resulted in a noticeable uptick in sales.
- Rising prices and limited supply: Home prices have reached record highs this year, supported by steady buyer demand. Although the number of homes on the market has increased compared to last year, it remains significantly below pre-pandemic levels.
- Economic and political uncertainty: With concerns about a potential recession and the upcoming U.S. Presidential election, many buyers and sellers have adopted a cautious approach. Additionally, the new rules around real estate agent fees are adding to the hesitancy.
Redfin Senior Economist Elijah de la Campa commented, "Mortgage rates have fallen by more than a percentage point since their peak in 2024, but the number of homes changing hands has not increased significantly. Many listings have become stagnant due to lack of demand, particularly for homes that require extra work. As most homeowners are locked into low rates, mortgage rates will need to drop further for many to consider selling."
Additionally, the rate of homes being listed for sale reached its lowest level since at least 2012. In the first eight months of 2024, only 32 out of every 1,000 homes were listed for sale, down 30% from 2019 (46 listings per 1,000 homes) and 29% from 2021 (45 listings per 1,000 homes).
Suburban and rural homes are changing hands slightly more frequently than urban homes. Approximately 25 out of every 1,000 single-family homes and condos/townhouses in suburban and rural areas sold in the first eight months of 2024, compared to about 24 in urban areas. Since 2019, turnover rates for suburban and rural single-family homes have dropped by 32.9%, while condos/townhouses fell by 37.6%. Urban areas saw single-family home turnover rates decline by 25.8%, and condos/townhouses dropped by 35.2%. The largest decline was seen in condos/townhouses, due to rising HOA and insurance costs amid increased inventory.
Some cities, particularly in the Sun Belt and metro areas near New York, recorded the highest turnover rates. Phoenix led with 38 out of every 1,000 homes sold, followed by Newark, NJ (37), Nashville, TN (36), and Tampa, FL (35). These cities remained active throughout the pandemic due to affordable living and work-from-home opportunities. Commuter-friendly metros like Newark and Nassau County, NY, continue to have higher turnover due to the appeal of suburban living near New York.
All metro areas saw a reduction of at least 10% in homes changing hands compared to 2019, with San Jose, CA, experiencing the smallest drop (-13.7%), followed by San Francisco (-18.1%) and Detroit (-14.6%).
On the other hand, California had seven of the 10 metros with the lowest turnover rates, with Los Angeles ranking lowest at just 15 out of every 1,000 homes changing hands. This trend is linked to the state's tax laws, especially Proposition 13, which incentivizes homeowners to stay in place by limiting property tax increases. Despite the lower turnover in California, the Bay Area saw an increase in home sales in 2024 compared to 2023, with San Jose (+13.1%), San Francisco (+3.5%), and Oakland (+1.6%) all showing gains.
Austin recorded the most significant drop in turnover from 2019, with sales falling from 59 out of every 1,000 homes to 30 in 2024, a decline of 49%.
