Weak buyer demand, weakening home prices and overall uncertainty in the economy are causing home sellers to change their minds and exit the market.
According to Redfin, nearly 85,000 U.S. sellers took their homes off the market in September, up 28 percent from September 2024 and the highest level for the month in eight years.
Sellers are on the list because many listings are getting stale, and there are more long-term properties on the market. Redfin reported that 70% of listings were on the market for 60 days or more in September.
Homeowners are seeing significantly weaker prices and will wait rather than accept a lower offer. Prices were up 1.3 percent over the year in September, down from a 1.4 percent gain in August, according to the S&P Quotient Case-Shiller U.S. National Home Price NSA Index.
“Inventory frequency keeps inventory tighter than it looks 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 lower offers, that effectively reduces the supply of homes that are actually available to buyers. That drives up sales prices.”
Some sellers are slashing prices — even multiple times. According to Zillow, the typical price cut is about $10,000, but multiple cuts are becoming more common as homes take longer to sell. General listings saw a total of $25,000 in price cuts in October, matching Zillow’s biggest discount ever.
The housing market is now heading into its slowest season. While 1 in 5 homes are listed, they may not be for several months, as sellers will likely wait for the busier spring season to try again.
Home prices are now 50% higher than they were five years ago, but some sellers who bought in the last few years are facing potential losses. About 15% of homes that were manufactured in September were at risk of selling at a loss, the highest share in five years, according to Redfin.
According to Realtor.com, the supply of homes is now about 15 percent higher than a year ago, but that will likely shrink in the coming weeks due to the weather and weakening consumer sentiment among buyers and sellers.
Pending sales in October, which are based on signed contracts, were up 1.9 percent in the month from a year ago and essentially flat, according to Realtors. The monthly bump may have been due to a slight drop in mortgage rates, which rose again in November.