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Housing market slowdown: Only 1% of homes have changed hands this year

There is a massif shortage of houses for sale this year, and buyers are struggling.

new data from real estate brokerage Redfin shows that just 1 percent of U.S. households changed hands in the first half of this year, a paltry 14 out of 1,000.

This is the lowest rate in a decade. During the same period in 2019, before the pandemic turned the housing market upside down, 19 out of every 1,000 homes changed ownership. According to Redfin’s calculations, that means homebuyers have 28% fewer homes to choose from than before the pandemic.

Not all homes are created equal when it comes to billing. Redfin found that buyers looking for large homes in the suburbs have seen the biggest decline in their options—the turnover rate dropped 33 percent compared to 2019. It’s no surprise: This type of home were very popular during the pandemic, when remote work policies allowed urban professionals to leave cities in search of more space at a more affordable price.

On the other hand, the turnover rate for townhomes and townhomes did not drop much (16%) between 2019 and 2023.

According to Redfin, mid-sized single-family homes (those with 2 or 3 bedrooms) in urban areas have been the most difficult for buyers to find. Just 10.6 out of 1,000 changed hands earlier this year, compared to 14.2 out of 1,000 in 2019. Redfin experts say these types of homes have always been rare in all types of neighborhoods , because they are not as profitable for builders. and families tend to put up with them longer.

Why is it so hard to find a house for sale?

One of the main causes of the large drop in housing turnover is the state of type of mortgagewhich today are around 7% compared to about half that number before the pandemic.

Higher mortgage rates mean that many would-be sellers choose to stay rather than list their homes and be forced to take out a mortgage at a rate that is significantly higher than what they already have.

And that’s a big deal for buyers: Nearly a third of real estate agents named inventory shortages as the biggest factor keeping their clients from making a home purchase, a recent finding. poll by the National Association of Realtors found.

Falling rates could help ease some of the pain, experts say.

“Mortgage rates falling closer to 5% would make the biggest impact on the affordability crisis,” Redfin Deputy Chief Economist Taylor Marr said in a blog post, “freeing up some inventory and reducing monthly payments.”

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