Home Sellers Are Hitting the Pause Button

The housing market is experiencing a notable shift. More homeowners are deciding to pull their properties off the market. This trend is driven by several factors, including weak buyer demand, softening home prices, and overall economic uncertainty.

Key Statistics

• September Delistings: Nearly 85,000 U.S. sellers took their homes off the market.
• Year-over-Year Increase: This number is up 28% from the same month last year.
• Eight-Year High: It's the highest level seen in eight years for September, according to Redfin.

Reasons for Delistings

Many listings are sitting unsold for extended periods. In September:

• 70% of listings were on the market for 60 days or longer.
• Homeowners are reluctant to accept lower offers, preferring to wait for better conditions.

Home Price Trends

Home prices are not showing strong growth. In September:

• Prices were only 1.3% higher than the previous year.
• This is a slight decrease from the 1.4% rise seen in August.
• Data provided by the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.

Expert Insights

Asad Khan, a senior economist at Redfin, noted that the frequency of delistings keeps inventory tighter than it appears. When tens of thousands of homeowners pull their homes off the market, it reduces the supply of available homes. This helps keep sale prices elevated.

Price Cuts and Discounts

Some sellers are resorting to lowering prices, sometimes multiple times. In October:

• The typical price cut was around $10,000.
• Multiple reductions are becoming more common as homes take longer to sell.
• The typical listing saw $25,000 in cumulative price cuts, matching the largest discounts ever recorded by Zillow.

Seasonal Trends

The housing market is entering its slowest season. While 1 in 5 delisted homes are relisted, this may not happen for several months. Sellers are likely waiting for the busier spring season to try again.

Long-Term Price Comparison

Home prices are still 50% higher than they were five years ago. However, some sellers who bought in the last few years are facing potential losses. In September:

• About 15% of the homes delisted were at risk of selling at a loss.
• This is the highest share in five years, according to Redfin.

Supply and Demand

The supply of homes for sale is about 15% higher than it was a year ago. However, this is likely to shrink in the coming weeks. This is due to the season and weakening consumer sentiment among both buyers and sellers.

Pending Sales

Pending sales in October, based on signed contracts, were up 1.9% month to month. They were basically flat from a year ago. The monthly bump may have been due to a small drop in mortgage rates, which then turned higher again in November.