America’s resale housing market remains woefully — perennially, even– beset.
Closings have managed just a handful of meaningful monthly gains since plunging in early 2022 from a ~six million annual rate to the four million pace where existing home sales have loitered for more than two years.
As I put it last month while editorializing around the latest read on the NAR’s existing home sales index, it “says a lot about the resale market for US homes when a 1.5% month-to-month increase counts as a robust result.”
One of the generally accepted narratives to explain the situation says it’s an inventory problem stemming originally from the so-called “golden handcuffs” effect, wherein homeowners are loath to trade a three- or four-handle mortgage for a six-handle rate.
There’s doubtlessly a lot of truth to that (nearly three-quarters of homeowners with a mortgage have a rate below 5%), but inventories are up of late, rates are down (albeit still north of 6%) and sales haven’t responded. Have a look at the figure below which uses Redfin’s data to illustrate the lowest turnover in history for the resale housing market.
“Just 28 out of every 1,000 US homes changed hands in the first nine months of 2025, the lowest rate since the 1990s,” Mark Worley and Grishma Bhattarai remarked.
The chart also shows an uptick in listings. Although 2025 still counts as the third-slowest rate in at least 13 years, it’s at least an improvement from the 3.5% rate observed in 2023.
Why are sales not improving despite more inventory (however slight the increase) and rates relief (however marginal)? Simple: The homes are just too damn expensive. We’re too far gone.
I’ve said it again and again: Anyone with $75,000 in cash, perfect credit and the kind of income you need to show to finance a half-million purchase at rates north of 6% pulled the trigger last year. What’s left are people for whom some part of that math doesn’t work. Maybe they have the downpayment, but not the income. Or vice versa. Or maybe their credit score’s south of 750.
Whatever the case, it’s going to take a lot of movement in prices, a lot of movement on rates or else a long stretch of negative inflation-adjusted annual price returns to get this market thawed.
“Buyers are walking away from deals [and] others aren’t even shopping, waiting instead for prices or mortgage rates to come down,” Chen Zhao, Redfin’s head of economics research said. “On the other side, many sellers are staying put. When both sides hesitate, sales naturally fall to historic lows.”
