Weak buyer demand, falling home prices and general uncertainty in the economy are combining to cause home sellers to change their minds and get out of the market.
Nearly 85,000 U.S. sellers took their homes off the market in September, up 28% from September 2024 and the highest level for that month in eight years, according to Redfin.
Sellers are delisting because many listings are becoming outdated and staying on the market longer and longer. Redfin reported that 70% of listings in September had been on the market for 60 days or more.
Owners see prices dropping considerably and prefer to wait rather than accept a low offer. In September, prices were up 1.3% year over year, up from 1.4% in August, according to the NSA S&P Cotality Case-Shiller US National Home Price Index.
“The frequency of delistings keeps inventories tighter than it appears on paper,” said Asad Khan, senior economist at Redfin. “When tens of thousands of homeowners take their homes off the market rather than accept a low offer, it effectively reduces the supply of homes actually available to buyers. This keeps sales prices high.”
Some sellers lower their prices, even repeatedly. The typical price drop is around $10,000, but multiple reductions are becoming more common as homes take longer to sell, according to Zillow. The typical listing saw cumulative price drops of $25,000 in October, matching the largest discounts Zillow has ever recorded.
The real estate market is now heading into its slowest season. Even if one in five delisted homes goes back on the market, that might not happen for several months, as sellers will likely wait until the much busier spring to try again.
Home prices are still 50% higher than five years ago, but some sellers who bought in recent years face potential losses. About 15% of homes delisted in September were at risk of being sold at a loss, the highest share in five years, according to Redfin.
The supply of homes for sale today is about 15% higher than a year ago, according to Realtor.com, but is expected to decline in the coming weeks, both because of the season and weakening buyer and seller confidence.
Pending sales in October, which are based on signed contracts, increased 1.9% month-over-month and were virtually flat with last year, according to real estate agents. The monthly increase could be due to a slight drop in mortgage rates, which then increased again in November.