Amid persistent housing affordability challenges and economic uncertainty surrounding the jobs market and U.S. trade policy, buyers and sellers have waffled over when to wade into the muddy waters of the current housing market.

Mortgage rates have trended lower over the course of 2025 but remain nearly double pandemic-era lows. Home price gains have cooled, or even declined in some markets, but continue ticking upward on an annual basis.

Active listings have risen in some regions more than others, adding to available inventory, but have not recovered to pre-pandemic levels on a national scale.

Hence, some buyers have found more options on the market and sellers willing to negotiate, but monthly mortgage payments remain starkly higher than just five years ago.

Since the beginning of 2020, the average principal payment on a mortgaged single-family home has increased 23%, compared to a 27% rise in interest, 70% rise in property insurance costs and 27% rise in property taxes, ICE Mortgage Technology reported last month.

“America’s housing market is defined right now by caution,” said Chen Zhao, head of economics research at the listing platform Redfin, in a research brief published Friday detailing the impact of these market dynamics.

Only 2.77% of U.S. homes — roughly 28 of every 1,000 — have changed hands through the first three quarters of 2025, marking the lowest home turnover rate in at least three decades, Zhao’s research shows.

The turnover rate represents the number of homes sold in the first nine months of the year, divided by the number of sellable homes in existence.

According to Redfin data, 2012 turnover rates of 3.39% in the aftermath of the 2008 financial crisis steadily rose to 4.21% in 2017 before declining to 3.9% in 2020. Turnover rates spiked to 4.44% in 2021 and have remained below 2023’s 2.86% mark since.

“Buyers are walking away from deals more often, sometimes due to affordability issues and sometimes because they’re reevaluating whether now is the right moment to commit,” Zhao added. “On the other side, many sellers are staying put — either because they’re locked into low rates or unwilling to accept offers below expectations.”

The slow turnover rate is not altogether surprising, given that home sales in 2025 are tracking 2024’s three-decade lows. This year’s turnover rate of 2.77% is one basis point lower than last year’s 2.78%.

Existing homes were sold at an annualized pace of 4.06 million units in September, according to the National Association of Realtors, the same pace as last year’s full-year results.

Nevertheless, Redfin’s analysis indicates that 38% fewer homes have sold in 2025 than during the pandemic-era peak, illustrating the reversal in market dynamics that have plagued home sales since the Federal Reserve began hiking interest rates in late 2022.

Corresponding figures published last week by the real estate market analytics firm Attom revealed U.S. homeowners are staying put in their current homes longer than at any point in the past quarter century.

Average homeownership tenure — the time between a home’s purchase and its sale — stretched to 8.39 years for third-quarter sales, up from 8.13 years in the second quarter, seven years in the third quarter of 2014, and closer to four years in the third quarter of 2004.

The Federal Housing Finance Agency, regulator of the government-sponsored mortgage investors Fannie Mae and Freddie Mac, recently updated its National Mortgage Database with outstanding residential mortgage statistics through the second quarter.

The figures show typical homeowners with a mortgage enjoy a rate of 4.3% on an average monthly mortgage payment of $1,953.

Cooling home prices and lower borrowing costs have eased pressures on homebuyers in recent months. But the median monthly payment applied for by new homebuyers in September was $2,067, according to Mortgage Bankers Association (MBA) data, showing the affordability gulf that still needs to be crossed for first-time buyers or existing owners.

Edward Seiler, associate vice president of housing economics for the MBA, expressed optimism in a press release announcing the figures.

“With mortgage rates expected to stabilize and home prices remaining flat, we anticipate slightly stronger housing demand heading into 2026,” Seiler stated.

And yet, the MBA forecasts that average 30-year mortgage rates will end 2026 at 6.3%, in line with current levels. Fannie Mae’s most recent economic and housing outlook predicts year-end 2025 mortgage rates of 6.3%, with rates dropping to 5.9% by the end of next year.