A combination of cooling buyer demand, softening home prices, and broad economic uncertainty is prompting a growing number of homeowners to pull their properties from the market.
In September, nearly 85,000 U.S. home sellers delisted their properties, a 28% increase from the same month last year and the highest level for September in eight years, according to data from Redfin. The trend is driven by an increase in listings lingering on the market; Redfin reported that 70% of homes for sale in September had been listed for 60 days or more.
With home price growth slowing, many owners are choosing to wait rather than accept a lower offer. According to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, prices in September were 1.3% higher year-over-year, a slight deceleration from the 1.4% annual gain seen in August.
“The frequency of delistings is keeping inventory tighter than it appears on paper,” said Asad Khan, a senior economist at Redfin. “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.”
While some sellers delist, others are resorting to price cuts. According to Zillow, multiple price reductions are becoming more common as homes take longer to sell. The typical listing saw a cumulative price cut of $25,000 in October, matching the largest discount Zillow has ever recorded.
As the housing market enters its traditionally slowest season, many delisted homes may not return until the much busier spring market. While prices are still approximately 50% higher than they were five years ago, sellers who purchased more recently face a greater risk. Redfin notes that about 15% of the homes delisted in September were at risk of selling at a loss, the highest share in five years.
The overall supply of homes for sale is about 15% higher than a year ago, according to Realtor.com. However, this figure is expected to shrink in the coming weeks due to seasonal slowdowns and weakening sentiment among both buyers and sellers.
Despite these headwinds, pending home sales, which reflect signed contracts, rose 1.9% in October from the previous month and were nearly unchanged from a year ago, according to the National Association of Realtors. This modest increase may have been influenced by a temporary dip in mortgage rates, which have since risen again.
Source link
