Approximately 14 out of every 1,000 U.S. homes changed hands during the first half of the year — the lowest turnover rate in a decade, according to a new report from Redfin.

Back in 2018, Freddie Mac stated that the country still needed about 2.5 million extra homes in order to meet demand. Then the pandemic homebuying boom depleted already-low inventory levels and high mortgage rates in the second half of 2022 chained many homeowners to their existing low rates. In short, inventory hasn’t been able to rebound.

This phenomenon is even more drastic in the suburbs: only 1.6% of large suburban homes changed hands this year — two-thirds the amount from 2019. That means buyers have 33% fewer options than they had before the pandemic.

“New listings normally hit the market on Thursdays, and I have buyers who are excitedly checking their Redfin app Thursday mornings, only to find nothing new,” said Heather Mahmood-Corley, an agent with Phoenix Redfin Premier. “That goes for buyers in every price range in every type of neighborhood, but what people want are those move-in ready, mid-sized homes in neighborhoods with highly rated schools. Those are the hardest to find because for people to buy one, someone needs to sell one.”

The housing segment with the least market activity so far this year is single-family homes in the city. Only 11 out of every 1,000 homes in this category went on the market.

“The quick increase in mortgage rates created an uphill battle for many Americans who want to buy a home by locking up inventory and making the homes that do hit the market too expensive,” said Redfin Deputy Chief Economist Taylor Marr, noting that the typical home is selling for about 40% more than before the pandemic. “Mortgage rates dropping closer to 5% would make the biggest dent in the affordability crisis by freeing up some inventory and bringing monthly payments down.”

Of course, supply varies from city to city. In places like Newark, New Jersey and Nashville, Tennessee, where construction has remained robust, nearly 2.5% of houses changed hands. In contrast, only 0.6% of homes changed hands in the San Francisco Bay area.

“There are a few other things that would boost turnover and help make homes more affordable,” Marr added. “Building more housing is imperative, and federal and local governments can help by reforming zoning and making the building process easier. Financial incentives, like reducing transfer taxes for home sellers and subsidizing major moves with tax breaks, would also add to supply.”