Why Home Turnover Rates Are at a 30-Year Low

According to the U.S. Chamber of Commerce, there is currently a shortage of 4.7 million houses across America. Several factors contribute to America’s housing market, including new home construction, shifts in demand from renting to buying, and turnover rates. This article will focus on home turnover, or the rate at which homes are bought and sold.

Turnover rates can have a bigger impact on the housing market than people realize, and are also affected by several macroeconomic trends. Explore why home turnover rates are now at record lows, reaching a 30-year low, and what can be done from a buyer and seller’s perspective.

What Is Home Turnover and Why Does It Matter?

Turnover is the number of homes that sell in a particular market. The turnover rate is defined as the number of homes sold in divided by the total number of sellable homes in a given time period. Turnover rate is usually reported as “sales per every 1,000 homes,” which makes it easier to compare markets against each other. For example, in early 2025, the turnover rate in the United States dipped to 28 out of every 1,000 homes, marking the lowest turnover rate and lowest turnover rate in 30 years.

A high turnover rate usually indicates a hot market. A lot of people are selling their homes, and there are ample buyers to make offers. A low turnover rate usually means a market is cooling. Homeowners aren’t listing their properties as expected, and there may be fewer buyers to place bids, slowing down home sale timelines.

Low turnover doesn’t necessarily mean people don’t want to move. Rather, it means something is holding them back. Economic experts often track the year’s turnover rate as a key indicator for market health to learn about consumer behavior and market health.

What Historic Lows in Turnover Rates Mean for the Country

Currently, turnover rates have fallen to historic lows, reaching their lowest level in decades, with fewer people than ever listing their homes. Researchers believe this reflects economic uncertainty in the United States. People would rather stay in their current space – the financial situation they know – rather than face changes that could increase their monthly expenses. Some experts are going so far as to say the “market is frozen” with sellers unwilling to move from their current homes. The U.S. housing market has slowed to a crawl this year due to sky-high home prices and elevated borrowing costs.

Unfortunately, unfreezing the market isn’t easy. When both buyers and sellers hesitate, the market naturally falls to historic lows. There isn’t a single cause preventing people from listing their properties, which means there needs to be multiple solutions to increase mobility. The market is defined right now by caution, low turnover, and economic uncertainty. Home prices and mortgage rates remain near record highs, and turnover rates are still well below pre-pandemic levels. Until the turnover rate increases, the deficit could remain in place, affecting America’s housing market as a whole.

This guide will focus on the current causes of turnover rates and why they have reached historic lows. This may provide solutions for breathing life back into the housing market.

Mortgage Rate Lock-In Is One of the Biggest Factors

Mortgage rates have been credited as one of the biggest drivers affecting low turnover rates. Many homeowners are currently ‘rate locked’ into their mortgages with low rates, making them reluctant to sell. More than 70% of U.S. homeowners with a mortgage hold a rate below 5%, compared to today’s average rate of 6.17%. This reluctance is known as the ‘mortgage rate lock-in effect,’ which causes many sellers to hesitate and contributes to historically low home turnover. During the COVID-19 pandemic, interest rates dropped between 2-3%, but then rose to 6-7% in recent years. In 2025, average mortgage rates hovered between 6.17% and 6.6%. Many homeowners who bought when rates were low don’t want to lose their favorable loan terms by moving. This phenomenon is referred to as “golden handcuffs” because homeowners are staying in properties they don’t love because the financial terms are too good to give up.

You can use a mortgage calculator to understand how competitive low mortgage rates can be. A $300,000 loan at a 3% interest rate would have an estimated $1,256 monthly payment for a 30-year term (before property taxes and insurance). The same size loan at 6% would have a $1,800 monthly payment. The 6% loan would also cost $192,000 more over its lifetime.

Higher mortgage rates affect all buyers, including homeowners who want to buy larger properties, people making lateral moves, and even people who are downsizing. A seller moving to a smaller, more affordable home might end up with the same mortgage payment (or higher) because of interest rates.

Some experts believe that lowering mortgage rates is one of the best ways to increase turnover, because homeowners would be able to unlock their “golden handcuffs,” and it would be financially viable to move.

Affordability Challenges Limit Move-Up and First-Time Buying

Home prices can also affect this year’s turnover rate and prevent people from moving or entering the market for the first time. The median home price in the U.S. surged roughly 53% over the last six years, reaching record highs. In Q2 2020, the median home price in the United States was $317,100. By Q2 2025, home prices had jumped to $410,800. This median sale increase of nearly $100,000 priced out many buyers who would otherwise transition out of renting, while also limiting the mobility of homeowners who would transition to different homes. Many would-be buyers and sellers are re-evaluating their decisions due to these affordability challenges and may benefit from using home value estimators to better understand what their home is currently worth.

Buyers “moving up” has an important impact on inventory. For example, a first-time homebuyer might sell their house when they get married or are ready to start a family. They will want a larger home to accommodate more people. However, if home prices are too high, they might choose to stay in their current house. This reduces turnover rates and lowers the number of available starter homes for the next generation of first-time homebuyers.

Unfortunately, drops in median sale prices might not increase turnover as much as economists expect. If this occurs, some homeowners might still avoid moving because they don’t want to lose money on the sale. They might hope for the market to rebound so they can enjoy higher profits and a greater number of buyers.

Demographic Shifts Reduce Natural Turnover

America’s housing market isn’t just affected by economic trends. Societal changes can also impact when people move. For example, more elderly Americans want to “age in place,” or stay in the homes they have lived in for decades. One survey found 90% of adults over 65 want to remain in their current homes as they get older.

Approximately 54% of Baby Boomers who own homes have paid off their mortgages, resulting in low monthly costs that make moving unattractive. Homeowner tenure in the U.S. has increased from a median of 6.5 years in 2005 to 11.8 years in 2024. This is part of a broader trend known as ‘The Great Stay,’ where both housing and job movement have slowed significantly.

This trend reduces turnover because older Americans aren’t entering assisted living and opening up homes in the market. People are also living longer, further reducing turnover from death. Even the cost of elder care can affect the housing market. The average cost of assisted living in the United States is $5,190 per month, and many people find it preferable or more affordable to hire in-home aids while remaining where they are.

The aging-in-place trend isn’t the only demographic factor contributing to turnover. Remote work and return-to-office mandates also impact home sales. Many remote workers have created houses they love because they spend more time there and are unwilling to give up these properties. Return-to-office mandates also keep workers in certain geographic areas because they no longer have the flexibility to move to new communities.

Limited New Construction Keeps Owners Locked In

One solution to the lack of housing is to build more. If existing homeowners are unwilling to move, new properties should be built for potential buyers. However, building new homes isn’t always easy, and new supply can’t pop up overnight. The COVID-19 pandemic significantly disrupted the supply chain, making it hard and expensive to procure materials. In 2025, tariffs and labor shortages are also disrupting home-building processes, which means fewer homes are available for new construction buyers. 

There is also the issue of new construction locations. It’s hard to build single-family homes in major metros, unless builders buy land in the suburbs. The places where homes are available aren’t always in communities that people are moving to. This means that some markets are incredibly tight, while others have housing staying on the market much longer due to reduced demand. 

Uncertainty Makes Buyers and Sellers Hesitate

General economic concerns also affect existing home sales. The Federal Reserve Bank of St. Louis keeps an Uncertainty Index for the United States. It became particularly volatile during the COVID-19 pandemic and again in 2025. This means people are worried about the future of the economy and how it affects them directly, like borrowing costs for loans and job security. When uncertainty increases, both sides hesitate—buyers and sellers are reluctant to act, and as a result, sales naturally fall. Many buyers and sellers are waiting for the right moment to make a move, hoping for more favorable conditions. Additionally, concerns about job security and inflation are causing potential buyers to delay major purchases.

One bright spot is that economic uncertainty doesn’t necessarily kill demand for new houses or homeowner interest in moving. It simply delays it. Many would-be buyers put off life changes for a year or two until they feel better. This means that the economy’s current impact on turnover rates could lessen in the future. However, the current stalemate between buyers and sellers is expected to persist unless mortgage rates fall significantly or incomes rise faster than home prices.

Lack of mobility also restricts property tax growth because buyers don’t get fresh appraisals on homes. Values may be set during more affordable times due to homestead exemptions, reducing income to communities.

How Low Turnover Impacts Buyers

When sales per 1,000 homes drop across the country, economics research shows that buyers are usually impacted more than sellers. The housing market is defined by the number of buyers versus available homes. When there are more buyers than sellers, the market gets more competitive. Turnover rates can also fluctuate throughout the months of the year, which affects when buyers have more or fewer opportunities to find homes. Here are a few things that happen when turnover drops.

• There are fewer listings. Without new listings, buyers have to fight for existing inventory. This means right competition and increased prices because of bidding wars. Low turnover can lead to affordability issues.
• Buyers remain renters longer. In some areas, reduced inventory might also lead to fewer buyers entering the market, especially when borrowing costs remain high. This prevents people from building their wealth through homeownership.
• Limited choice further stagnates the market. Even sellers who want to move might take longer to list because they want to find their next home first. This creates a snowball effect where properties that are ready to list remain off the market for longer than expected. Different property types are affected in unique ways—single-family homes are performing better than condos and townhouses, while condo sellers in particular face unique challenges due to higher supply and buyer hesitations.

Buyers in low-turnover markets need to be patient. Rushing into a home they don’t love could mean buying a property that’s frustrating to live in and hard to sell in the future.

How Fewer Homes Impact Sellers

Sellers are also affected by low turnover rates. They may have a harder time finding their next home and could see fewer offers if buyers are worried about the market. Many sellers are unwilling to accept offers below their expectations due to their low mortgage rates, often holding out for higher prices rather than settling for less. One unique problem that sellers face is having fewer comparable sales to review when setting listing prices. If sellers overprice their homes because of limited data, they might not receive bids until the listing is adjusted. This slows the sale process, frustrating homeowners. For more insights, review these factors that can affect a home appraisal, which can also influence how your home is valued and marketed.

However, many sellers benefit from reduced inventory, especially with single-family homes. Without new listings, buyers have to fight for sellable homes. If your home is in good condition and listed for sale at a reasonable rate, it could move off the market quickly.

What Could Unlock More Home Turnover?

In the same way that there isn’t a single problem causing the turnover freeze, a single solution won’t unlock inventory. Here are a few potential solutions that could increase the national home turnover rate. 

• Interest rate stabilization or decline. Lower rates could make buying more affordable. Stabilization could also benefit the market because people wouldn’t wait for better rates to buy. 
• Changes in economic conditions. When people feel more confident in the economy, they may be more likely to move. 
• Improved affordability or wage growth. This could combat high housing prices that pushed some people out of the market. 
• Increased supply of condos and single-family homes. When more homes are available, buyers don’t have to enter bidding wars to win homes. 
• Greater societal changes. Reducing assisted living and healthcare costs or investing in remote workplace policies could send ripple effects through the economy. 

The economy and market are always changing. While these solutions may increase turnover, other fluctuations could affect it further down the line.

Local Real Estate Experts Help Navigate Low Turnover

Buyers and sellers don’t have control over their local real estate markets, but they can make strategic decisions and work with the right people to make the process easier. A qualified real estate agent keeps up with regional trends and understands what is happening at a county, city, and even neighborhood level. They can create listings that attract buyers and help craft offers that get noticed. 

Turn to FastExpert if you are preparing to enter a market with low turnover. An experienced Realtor can help you navigate each step of the buying or selling process, no matter what challenges you face. Review local agent profiles and interview real estate agents to find one you trust. Your real estate dreams can be a reality, even in a tight market. Start building your team today.