US Existing-Home Sales Stay One-Third Below Pre-2020 Averages as Median Prices Hit Records

Mortgage-rate lock-in has immobilized owners who refinanced below 4 percent during 2020-2021; 82 percent of outstanding mortgages now carry rates under 5 percent per Federal Reserve Bank of New York data. Sellers face replacement rates above 6.5 percent, raising monthly payments by several hundred dollars on comparable properties and removing incentive to transact. Volume has fallen to levels last seen in the mid-1990s despite a population increase of 70 million.

Underbuilding since 2008 left a structural shortfall of 3.8 million units, per Freddie Mac estimates. Insurance, tax, and assessment costs now rival interest in monthly ownership expense and differ sharply by ZIP code, further segmenting market access. Buyers entering after 2022 absorb these layered costs without offsetting low-rate debt.

The resulting standoff sorts households by purchase date rather than by credit or income. Pre-2022 owners remain insulated; later entrants face elevated rents and delayed wealth accumulation. Appraisals increasingly rely on stale comparables, eroding price discovery.

No near-term policy lever resets the stock of low-rate mortgages. Legalization of new construction requires three-to-five-year lags before occupancy, exceeding typical electoral cycles. Transaction volumes are therefore likely to stay depressed until either rates fall materially or a larger cohort of owners faces forced sales.