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The switching-cost math still weighing on resale housing market turnover
While the average 30-year fixed mortgage rate, as tracked by Mortgage News Daily, hit 7.07% on Thursday—its first 7-handle print since May 2025—the "market rate" isn't what most homeowners are actually paying. The effective aggregate rate on all outstanding U.S. mortgages is 4.4%. That rate is slowly grinding higher, but it takes time: most homeowners locked in their rate years ago, and the effective rate only rises as older, cheaper loans get paid off, refinanced, or sold.
Accounting for aggregate U.S. home prices, property taxes, insurance, and market mortgage rates, a homebuyer today would land around $3,010 per month on a typically priced U.S. home, assuming a 10% down payment. That's about $957 higher than the $2,053 typical monthly mortgage payment—including escrow—being paid across all outstanding mortgages. Think of that $2,053 figure as the effective mortgage payment: what existing homeowners are actually paying, on average, right now. The switching cost of moving from the typical rent ($1,962) or the typical effective mortgage payment ($2,053) up to today’s market mortgage payment ($3,010) is a big factor holding back resale transactions—and a big part of why U.S. existing-home sales have remained at “historically low” levels and state-to-state migration has been cyclically low ever since the Pandemic Housing Boom ended and mortgage rates spiked. Of course, new-home market has been able to prevent a greater pullback in transactions as homebuilders have leaned into net effective home price cuts/affordability adjustments over the past four years, when and where needed, to move product.
The U.S. existing-home market, largely speaking—despite some regional exceptions in pockets of the South, Mountain West, and West that have undergone price corrections—has thus far fought harder to prevent a more meaningful decline in nominal house prices, despite downward pressure.
For housing stakeholders, the narrative above is largely known. What ResiClub will explore below is what could ease this jam.
In the chart below, we added an additional data point: U.S. disposable monthly personal income per capita. In theory, switching costs in the resale market could also be eased if incomes rise, and the hit of selling to buy something else becomes a smaller share of disposable, after tax income.
In ResiClub's view, in order to improve resale switching costs and boost U.S. resale turnover, we still need more affordability improvement—some combination of rising U.S. incomes, falling market mortgage rates, or falling U.S. home prices.
In other words, either the delta between U.S. effective mortgage payments and U.S. market-rate mortgage payments needs to shrink notably, or the delta between U.S. market-rate mortgage payments and U.S. disposable incomes needs to shrink notably. Or some combination of both. Over the past couple of years, we've seen some mild improvements in U.S. housing affordability in the existing-home market, as nationally aggregated U.S. incomes (+1.1% year-over-year) have outpaced nationally aggregated U.S. home prices (+4.1% year-over-year right now)—and some regional housing markets have seen outright nominal declines. However, that progress on paper has been at least temporarily slowed given the recent jump in long-term yields, with the average 30-year fixed mortgage rate jumping from 5.99% on February 27, 2026 to 7.07% as of Thursday.
Big picture: Absent a material shock, that switching costs improvement is likely to remain a slow, multi-year process rather than a near-term unlock—meaning resale turnover is likely to stay historically depressed for a while longer and only slowly grind back up the “normal” range.
U.S. resale turnover
Below is ResiClub’s population-adjusted calculation for resale turnover. The population adjustment makes historical comparisons more apples-to-apples.
ResiDay 2026—will you be in the room?
We’re bringing back Jim Jacobi for ResiDay 2026. He was a crowd favorite last year.
Jacobi is the president of Parkland Communities. In addition to their Build-to-Rent arm, the Alpharetta, GA-based developer just launched a for-sale homebuilding unit.
Early Bird II pricing will remain in effect through the end of the day on September 30. ResiDay 2026 is on Friday, November 6, in New York City.
Do you own single-family rentals?
If so, you're invited to participate in the LendingOne-ResiClub SFR Investor Survey—Q3 2026.
