Memorandum
- From
- Derek Weston via Fast Company
- Date
- Filed
- Economy·3 min to read
- Re
U.S. Existing-Home Sales Stuck at Four-Year Low as Turnover Hits Historic Floor
ReU.S. Existing-Home Sales Stuck at Four-Year Low as Turnover Hits Historic Floor
Existing-home transactions have remained in the bottom quarter of historical turnover for four straight years, constrained by high mortgage rates and locked-in homeowners, while new-home sales hold closer to pre-pandemic levels.
U.S. existing-home sales have now spent four consecutive years at historically low turnover levels, according to an analysis of September data, marking an unusually prolonged slump in the resale market that has persisted across both resilient and softening regional markets.
The stagnation follows the pandemic-era housing demand surge, when mortgage rates spiked and the cost of moving became prohibitive for many homeowners. Since mid-2022, resale transactions have largely hovered near what analysts describe as the «Ds of Housing» floor — sales that occur only out of necessity, driven by life events such as death, divorce, disability, and other circumstances that force households to relocate.
Monthly headlines about existing-home sales rising or falling can be misleading, because they typically rely on the seasonally adjusted annualized rate published by the National Association of Realtors. When unadjusted monthly figures are examined and normal seasonal patterns are accounted for, the data show that resale activity has barely moved. An index that adjusts for population change using owner-occupied households places the current period in the bottom 25th percentile for resale turnover for four straight years.
The pattern holds across regions. Relatively resilient markets in parts of the Northeast and Midwest have seen the same constrained turnover as softer Sun Belt markets experiencing a more pronounced cyclical cooling. The common thread is a market where would-be sellers are reluctant to give up low mortgage rates and buyers face elevated borrowing costs.
New-home sales tell a different story. While they remain below their pandemic boom peaks, they are roughly on par with pre-pandemic levels in 2018 and 2019. That resilience has come at a cost to builders, particularly in Sun Belt markets such as Florida and Texas, where companies have made deeper cuts to net effective home prices. Builders have used mortgage rate buydowns, cash back at closing, and outright price reductions over the past few years, sacrificing margins to prevent an even steeper pullback in sales.
In local markets where active inventory has spiked and existing-home sales are pressing below the necessity-driven floor, some sellers will have to adjust their expectations if they want to close a deal. Early signs of that adjustment are already appearing in pockets of the Pacific Northwest, Texas, Florida, and Colorado as the market heads into the seasonally soft window.
The four-year stretch of depressed resale turnover represents a structural shift in the housing market rather than a temporary dip. With switching costs out of whack and rates elevated, the lock-in effect continues to suppress listings and transactions, leaving the market dependent on life-event sales and new construction incentives to sustain any meaningful volume.
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