Executive Summary
- The U.S. home turnover rate reached a historic low of 28 out of every 1,000 homes in the first nine months of 2025, marking the lowest rate since the 1990s.
- This unprecedented slowdown is attributed to persistent affordability challenges, economic uncertainty, and a widespread “rate lock” effect where homeowners are reluctant to give up their current low mortgage rates.
- Despite a minor increase in new listings, the rate remains historically slow, with significant metro-level variations, such as Virginia Beach having the highest turnover and New York the lowest.
The Trajectory So Far
- The historically low U.S. home turnover rate is primarily driven by persistent affordability challenges due to near-record high home prices and elevated borrowing costs, alongside a widespread “rate lock” effect where over 70% of homeowners hold significantly lower mortgage rates than current market rates. This situation is further compounded by general economic uncertainty, making both buyers and sellers more cautious.
Assessing Risk and Value
- The historically low U.S. home turnover rate, driven by high prices, elevated mortgage rates, and homeowner “rate lock,” signals increased risk for residential real estate investors due to limited inventory and potential for slower property value appreciation. This stagnation also poses a significant challenge to industries reliant on housing transactions, such as real estate brokerages, construction, and mortgage lenders, as reduced sales volume directly impacts their revenue and profitability, affecting their market valuations and overall investment appeal.
Expert Predictions and Forecasts
- Persistent affordability challenges, including near-record high home prices and elevated borrowing costs, are sidelining many potential buyers, while over 70% of mortgaged homeowners are reluctant to sell due to holding significantly lower interest rates than current market rates.
- Experts note a cautious sentiment dominating the market, with buyers frequently backing out of deals due to affordability or re-evaluating the timing, and sellers staying put either because of low-rate lock-in or an unwillingness to accept offers below expectations, collectively leading to historic low transaction volumes.
Just 28 out of every 1,000 U.S. homes changed hands during the first nine months of 2025, marking the lowest turnover rate since the 1990s. A recent analysis by Redfin attributes this significant slowdown to persistent affordability challenges, economic uncertainty, and a widespread reluctance among homeowners to give up their current low mortgage rates.
Historical Lows in Home Turnover
The 2.8% turnover rate recorded this year represents a slight decrease from 2.78% in 2024, when existing home sales hit their lowest point since 1995. This figure is notably lower than the 44 per 1,000 homes sold during the pandemic buying frenzy in 2021 and 40 per 1,000 in the pre-pandemic year of 2019.
Redfin defines the turnover rate as the number of homes sold in the first nine months of the year, divided by the total number of sellable properties. The analysis examined data from 2012 to 2025, confidently asserting that the current rate is the lowest in at least three decades.
Factors Driving Buyer and Seller Caution
Several key factors are contributing to the historically low turnover. Home prices remain near record highs, while borrowing costs are elevated, effectively sidelining many potential buyers. Furthermore, more than 70% of mortgaged U.S. homeowners currently hold interest rates below 5%, significantly lower than the prevailing rate of 6.17%, creating a “rate lock” effect that discourages selling.
Economic uncertainty, including concerns about job security and inflation, has also made buyers more cautious, leading many to delay major purchases. This collective hesitation from both buyers and sellers is the primary driver of the reduced transaction volume.
Expert Insight
Chen Zhao, Redfin’s head of economics research, emphasized the cautious sentiment dominating the housing market. “Buyers are walking away from deals more often, sometimes due to affordability issues and sometimes because they’re re-evaluating whether now is the right moment to commit,” Zhao stated. “On the other side, many sellers are staying put—either because they’re locked into low rates or unwilling to accept offers below expectations. When both sides hesitate, sales naturally fall to historic lows.”
New Listings and Property Types
While home sales have stagnated, the rate of new listings saw a minor increase to 3.9% (39 out of every 1,000 homes) in the first nine months of 2025. Despite this uptick, it remains the third-slowest rate recorded since 2012 and is down significantly from 52 per 1,000 homes in 2019.
Breaking down by property type, single-family homes sold at a slightly faster pace of nearly 30 per 1,000, compared to approximately 22 out of every 1,000 condos and townhouses. The sales turnover rate for condos and townhouses decreased by 3.3% year-over-year, while single-family homes experienced a modest 0.6% increase, reflecting increased challenges in the condo market.
Metro-Level Variations
Among the 50 most populous U.S. metros, Virginia Beach, VA, recorded the highest turnover rate, with 35.2 sales per 1,000 homes, representing a 5.3% year-over-year increase. Other metros with relatively high turnover included West Palm Beach, FL (32.6), Tampa, FL (31.2), Indianapolis (30.3), and Atlanta (30.1).
Conversely, New York registered the lowest turnover rate at 10.3 sales per 1,000 homes. Six California metros followed, including Los Angeles (11.5), San Francisco (13.2), and San Jose (14.8). California’s low housing turnover is partly attributed to Proposition 13, a state law that restricts property-tax growth, thereby incentivizing homeowners to remain in their properties.
Market Outlook
The U.S. housing market continues to grapple with historically low turnover rates, driven by a confluence of elevated costs, high interest rates, and economic uncertainty. This environment of caution from both buyers and sellers is expected to keep transaction volumes subdued as the market navigates these persistent headwinds.
