NEW YORK, NY — Americans are moving less, and the slowdown is being felt across the housing market and at Home Depot. Apollo data highlighted in a recent U.S. housing outlook show the probability of changing residence over the next 12 months has fallen to a record-low 13.5%.
The main drag is mortgage lock-in. Millions of homeowners still have loans below today’s market rates, so selling a home often means giving up a roughly 3% mortgage for one closer to 7%. That gap is keeping owners in place and reducing the chain of purchases that normally follows a move.
Existing-home sales and buyer activity show the same pattern. For a retailer tied closely to turnover, that has meant less momentum than it would see in a healthier housing cycle.
Why low-rate mortgages are keeping homeowners put
Around half of outstanding mortgages carry rates below 4%, and about two-thirds are below 5%, according to Apollo. By contrast, a new 30-year mortgage currently costs close to 6.7%, which makes trading up or downsizing much more expensive than it was a few years ago.
Federal Reserve researchers previously estimated that the lock-in effect explained 44% of the drop in mobility among mortgage borrowers between 2021 and 2022. That helps explain why home turnover has stayed unusually weak even after the initial shock of higher rates.
Apollo also notes that Americans were moving less even before mortgage rates surged, and renters are moving less too. Still, for homeowners sitting on cheap loans, the incentive to stay put remains unusually powerful.
Home sales and buyer counts show a frozen market
The latest housing figures reinforce the picture of a market that is not thawing quickly. Existing-home sales ran at an annualized pace of 4.06 million in July, about 1.2 million below the pre-pandemic average.
Redfin estimated that the number of active U.S. homebuyers fell to a record-low 967,000, leaving sellers ahead of buyers by nearly 500,000. That imbalance points to a market with limited urgency from both sides, especially when financing costs remain elevated.
For households considering a move, the math remains difficult. A lower rate on an existing loan can outweigh the appeal of a different house, neighborhood, or school district, and that reluctance is suppressing the broader flow of transactions.
Home Depot feels the strain when fewer homes change hands
Home Depot depends on housing turnover because moves often lead to spending on paint, flooring, appliances, and remodeling projects. When fewer homes sell, the company loses one of the biggest triggers for bigger-ticket purchases.
The retailer has remained resilient so far. In the second quarter, sales rose 5.7% to $47.9 billion, and adjusted earnings increased 5.1%. Even so, customer transactions fell 1%, and management said housing affordability continues to pressure larger discretionary projects.
Chief financial officer Richard McPhail said housing turnover has “never been lower as a percentage of the housing stock” and has stayed depressed for four years. That leaves the company waiting for a cycle it has not seen yet.
Rate cuts are not guaranteed to revive movement
Some investors are betting that higher borrowing costs may persist. Polymarket traders currently see roughly a 56% chance that the Federal Reserve raises rates by 25 basis points at its Sept. 16 meeting, up from about 30% before Fed Chair Kevin Warsh’s Jackson Hole speech.
Bond-market conditions are not offering much relief either. The 10-year Treasury yield, which strongly influences mortgage rates, has climbed to its highest level since Trump returned to office.
McPhail said Home Depot sees “a little bit of life” when rates fall, but “just no sign of an inflection point at this moment.” That suggests even modest relief may not be enough to restart the kind of housing activity the company needs.
A housing freeze with wider effects on households and retailers
The current lock-in effect is about more than one chain of stores. When fewer homeowners move, fewer people buy supplies for repairs, fewer sellers freshen properties before listing, and fewer buyers spend immediately after closing.
That creates a drag on the entire home-improvement ecosystem and keeps demand tied to replacement work rather than the larger wave of projects that usually follows a move. It also means that the housing recovery Home Depot has already spent four years waiting for remains out of reach.
For consumers, the message is equally clear: cheap existing mortgages have become valuable enough that many owners would rather stay put than take on a much costlier loan. Until that changes, mobility is likely to stay subdued.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
