Home Sellers Are Hitting the Pause Button

The housing market is experiencing a 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. In September, nearly 85, 000 U. S. sellers took their homes off the market. This number is up 28% from the same month last year. It's the highest level seen in eight years for September, according to Redfin. Why are sellers delisting? 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 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. The S&P CoreLogic Case-Shiller U. S. National Home Price NSA Index provides this data. 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. Some sellers are resorting to lowering prices, sometimes multiple times. The typical price cut is around $10, 000. Multiple reductions are becoming more common as homes take longer to sell. In October, the typical listing saw $25, 000 in cumulative price cuts, matching the largest discounts ever recorded by Zillow. 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. 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. About 15% of the homes delisted in September were at risk of selling at a loss. This is the highest share in five years, according to Redfin. 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 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.