The Housing Market Remains in Record Slump

With home turnover at its lowest rate in 30 years and first-time buyers at historic lows, builders continue to deal with a dismal market.

No matter what numbers you check, the U.S. home building market is at levels builders haven’t seen in decades – or ever. New statistics released over the past few weeks continue to paint a picture of a building landscape with both reduced sales and reductions in the number of buyers who normally would be making housing purchases.

For turnover rates, the levels are as low as they’ve been in nearly three decades, according to Redfin, the real estate listing service. “The number of U.S. homes that typically change hands as people relocate for work, retire or trade-up for more living space hasn’t been this low in nearly 30 years,” it reported.

“About 28 out of every 1,000 homes changed hands between January and September, the lowest U.S. home turnover rate going back to at least the 1990s,” Redfin’s analysis discovered.  

The home turnover rate represents the number of homes sold, divided by the total number of existing sellable properties. “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. We’re in a low-hire, low-fire labor market and I think that this goes hand in hand with that.”

The U.S. housing market, Redfin said, has been in this slump dating back to 2022, the year mortgage rates began climbing from historic lows that fueled a homebuying frenzy at the start of this decade.

In the meantime, new data from the National Association of Realtors shows that the share of first-time home buyers dropped to a record low of 21 percent, while the typical age of first-time buyers climbed to an all-time high of 40 years.

“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” said Jessica Lautz, NAR deputy chief economist and vice president of research in announcing the results of its new study. “The share of first-time buyers in the market has contracted by 50 percent since 2007 – right before the Great Recession. The implications for the housing market are staggering. Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.

“Unfolding in the housing market is a tale of two cities,” Lautz explained. “We’re seeing buyers with significant housing equity making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market.”

The NAR continues to advocate for government policies that promote home building. “Today, we must focus on policies that address the root cause of the affordability crisis: inadequate housing supply,” it said. “That means both unlocking existing inventory and enabling new construction. We need solutions that encourage more owners to sell, revitalize underused properties, streamline local zoning and permitting barriers and modernize construction methods to build more homes faster and more affordably.”

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