Home Sales Hit Historic Low

The Wall Street Journal (WSJ) recently published an article highlighting that US home sales hit a 30-year low. We all know the reasons: high interest rates, new construction cannot keep up with the demand, and potential sellers are sitting on historically low interest rates. Those would-be buyers are unwilling or unable to sell and would have to trade up for an interest rate that could be double.

The WSJ article points out that home sales have not been this low since 1995, but that's only half the story. In 2023, there were 131 million households in the US. In 1995, there were 99 million households.

The WSJ article ignores that the number of households has increased almost 25% over that period. Factoring in the larger number of households, the data reveals that we have to go back to 1982 to find a time with fewer home sales per household. The 30-year fixed mortgage rates peaked on October 21, 1982, at 18.39% and ended 1982 at 13.60%.

When rates do fall, the pent-up demand that has built over 2022 and 2023 will explode into a flurry of activity. Home movers account for about one-third of all self storage users, and we will see self storage demand and subsequent prices increase accordingly.

- Drew Dolan

DXD Capital Principal and Fund Manager