The Impact of High Mortgage Rates on Home Sales in the U.S.

Amidst the current rise in mortgage rates, homeowners in the U.S. are holding onto their properties. Data released by real-estate brokerage Redfin reveals that only 14 out of every 1,000 homes in the country were sold during the first half of this year. Prior to the pandemic in 2019, that number stood at around 19 homes per 1,000.

In simpler terms, Redfin states that “just 1% of the nation’s homes have changed hands this year,” marking the lowest share in at least a decade.

Redfin has been monitoring turnover rates as a gauge of housing availability since 2012. Instead of focusing on the number of listings or inventory, this data reflects how frequently homes are being sold.

The consequence of pandemic-era monetary policies, which pushed mortgage rates to historic lows, has been unexpected. The rise in rates has created a lock-in effect that is preventing homeowners from selling their current residences. This, in turn, has further depleted an already low level of housing inventory.

The San Francisco Bay Area appears to be the region with the lowest home turnover rate this year, according to Redfin’s findings.