Over the past 48 hours, the US housing industry remains in a deeply subdued state, continuing a pattern of historic lows in market turnover and affordability challenges. Current data shows just 28 out of every 1,000 homes have changed hands so far this year, a rate not seen in three decades. Across major cities, turnover is lowest in New York, Los Angeles, and San Francisco. This enduring slowdown is driven by high mortgage rates, which sit at 6.17 percent according to Freddie Mac, and persistent affordability concerns for buyers. Most sellers are locked in at sub-5 percent rates and are reluctant to sell and refinance at current higher borrowing costs. New and existing home sales have stalled at around four million annually, well below the pre-pandemic average of five million, despite modest optimism following the Federal Reserve’s rate-cutting moves in September.
Home price trends have also shifted. Year-over-year growth reached just 1.2 percent in September, the lowest rate in years. Some regions like Connecticut and Wyoming saw 5 percent annual gains, while prices fell notably in places like Florida and Washington D.C. Nationally, the market continues to see weakened demand and higher inventory, with 20 percent of US metro areas reporting price declines, a figure not seen since mid-2023. Meanwhile, serious mortgage delinquencies are rising in states experiencing sharper price falls, with homeowners paying 45 percent more in escrow costs than five years ago.
A marked shift in consumer behavior is evident. The share of first-time buyers plummeted to 21 percent, an all-time low, while the age of entry for ownership rose to forty. All-cash deals are up, benefiting wealthier buyers and exacerbating inequality, while first-timers and lower-income families face huge barriers. Analysts highlight the long-term impact, suggesting delayed ownership could cost new entrants over $150,000 in equity over a decade. Housing affordability, once mostly a coastal issue, has spread nationwide due to elevated rates and building costs, further exacerbated by tariffs and federal immigration policies reducing the construction workforce.
Industry leaders are responding by placing greater emphasis on equity-rich, cash-ready buyers and shifting focus to luxury markets. Yet wider market activity remains limited. Compared to last year, price growth, transaction volumes, and first-time buyer participation have all declined, leaving the industry facing an uncertain road ahead marked by supply chain challenges and regulatory disruptions.
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