Thousands of U.S. homeowners are pulling their properties off the market. Weak buyer interest, declining home prices, and economic uncertainty are forcing sellers to reconsider their plans. This trend marks a significant shift in the housing market, impacting both inventory levels and pricing strategies.
Key Takeaways
- Nearly 85,000 U.S. homes were delisted in September, a 28% increase from last year.
- Many homes are sitting on the market for 60 days or longer.
- Sellers prefer to wait for better offers rather than accept lower prices.
- Cumulative price cuts reached $25,000 in October, matching record highs.
Sellers Step Back from the Market
The U.S. housing market saw a notable increase in delisted properties in September. Almost 85,000 homes were removed from sale across the country. This figure represents a 28% jump compared to September of the previous year. It is the highest number of delistings for that month in eight years, reflecting a growing hesitation among homeowners.
Many listings are taking longer to sell, often becoming what the industry calls 'stale.' Data shows that 70% of homes listed in September remained on the market for 60 days or more. This extended selling period is a key factor in sellers' decisions to withdraw their properties.
Key Delisting Statistics
- September Delistings: Nearly 85,000 homes
- Year-over-Year Increase: 28%
- Listings on Market > 60 Days: 70% in September
Weakening Prices and Seller Reluctance
Home prices are showing signs of weakening, prompting sellers to reconsider their asking prices. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 1.3% year-over-year increase in September. This is a slight decrease from the 1.4% rise observed in August. This slowdown in price growth is making sellers hesitant to accept offers they view as too low.
"The frequency of delistings is keeping inventory tighter than it looks on paper," said Asad Khan, a senior economist. "When tens of thousands of homeowners pull their homes off the market rather than accept a low offer, it effectively reduces the supply of homes that are actually available for buyers. That keeps sale prices elevated."
This dynamic creates a complex situation. While more homes are technically available, a significant portion is not actively for sale due to seller dissatisfaction with current market conditions. This limits the actual supply for motivated buyers.
Increasing Price Reductions
Many sellers who remain on the market are resorting to price cuts. The typical price reduction is around $10,000. However, multiple price reductions are becoming more common as homes sit unsold for longer periods. In October, the average listing saw cumulative price cuts totaling $25,000. This matches the largest discounts recorded by some real estate platforms.
Market Seasonality
The housing market is now entering its slowest season, typically from late fall through winter. This means that homes delisted now are less likely to be relisted until the busier spring season. Sellers often wait for warmer weather and increased buyer activity to try again.
While some delisted homes are eventually relisted—about 1 in 5—this often happens after several months. Sellers hope for improved market conditions, particularly during the traditionally strong spring buying season.
Supply and Potential Losses
The overall supply of homes for sale is currently about 15% higher than it was a year ago. However, this increase may be temporary. The upcoming slow season and a weakening consumer sentiment among both buyers and sellers could lead to a reduction in available inventory in the coming weeks.
Despite recent fluctuations, home prices remain 50% higher than they were five years ago. Yet, some homeowners who purchased their properties in the last few years are now facing the risk of selling at a loss. Approximately 15% of the homes delisted in September were at risk of selling below their purchase price. This is the highest percentage observed in five years.
Buyer Activity and Mortgage Rates
Pending home sales, which reflect signed contracts, showed a slight increase in October. They were up 1.9% month-to-month and remained largely flat compared to a year ago. This modest bump in activity might be linked to a small, temporary drop in mortgage rates during October. However, mortgage rates have since risen again in November, potentially impacting future buyer interest.
- Pending Sales (October): Up 1.9% month-over-month
- Potential Factor: Temporary dip in mortgage rates
The current market environment requires careful consideration from both buyers and sellers. Sellers must weigh the desire for a higher price against the risk of their property sitting on the market for an extended period. Buyers, meanwhile, may find more room for negotiation but face ongoing challenges with interest rates and limited active inventory.
