The Blubber

US home sales are headed for the largest slowdown since 2011, per Fannie Mae.

In the first half of this year, a mere 1% of all US homes underwent a change of ownership, marking the lowest proportion in at least ten years, as per data from Redfin.

Merely around 14 out of every 1,000 existing homes transitioned from one owner to another during the initial six months of 2023, in contrast to the 19 out of 1,000 in the same period in 2019. This signifies that prospective homebuyers now have 28% fewer options compared to the pre-pandemic housing market disruption.

According to Redfin, the turnover rate seen prior to the pandemic is a fairly standard trend in the modern housing market. However, a more robust market would observe a turnover rate closer to 40 or 50 out of every 1,000.

The primary reasons behind the limited number of homes sold this year are the scarcity of available homes for purchase and the challenge of affording higher mortgage rates.

The heightened demand for homebuying during the pandemic era depleted housing supply, and this inventory shortage hasn't been rectified. Currently, there's an exceptionally low supply of homes available for purchase, as existing homeowners continue to benefit from their historically low mortgage rates ranging from 2% to 4%, prompting them to delay becoming buyers in a market where rates hover around 6% to 7%.

Read more: https://unusualwhales.com/news/only-1-of-us-homes-changed-ownership-this-year-the-lowest-share-in-at-least-a-decade