US real estate market faces mobility crisis

The United States real estate market is experiencing a crisis of mobility rather than a crisis of wealth. While American households hold approximately $35 trillion in home equity—averaging about $400,000 per occupied home—this wealth remains largely illiquid.

Homeowners are increasingly reluctant to move because they are locked into existing mortgages with significantly lower interest rates. This has resulted in a historic low in mobility, with only about 7% of households planning to move within the next twelve months. This paralysis affects various sectors, including real estate agents, mortgage lenders, title insurers, movers, and furniture retailers.

As a result, the market for home renovations is seeing increased activity, as homeowners find it more rational to expand, insulate, or modernize their current residences rather than purchase new ones. This trend is further supported by the aging of the American housing stock, which has reached a median age of 42 years. Apollo estimates that 75% of households can currently only afford a home priced below $300,000, while the median home price approaches $400,000.