Home sales are down, and so are new listings

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High home prices and mortgage rates above 6% are keeping buyers on the sidelines, while sellers are responding by pulling listings rather than cutting prices.
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Even after nine straight weeks of declines, with rates dropping to 6.26%, home-purchase applications rose only slightly.
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New listings remain scarce, keeping options tight for buyers.
Home buyers arent buying, in the face of record-high home prices and mortgage rates north of 6%. Sellers are responding, not by lowering prices but by taking their homes off the market.
The result is a housing market standoff. According to real estate brokerage Redfin, pending home sales fell nearly 1% from a year earlier during the four weeks ending September 21.
The dip was a surprise, considering mortgage rates had fallen for several weeks in a row. But the lower borrowing costs were not enough to attract buyers.
The weekly average mortgage rate has fallen to 6.26%, the lowest level in nearly a year and down from roughly 6.9% at the start of summer. The dip was in anticipation of the Feds first interest-rate cut of the year.
But steadily falling mortgage ratesthis marks the ninth straight week of declineshavent brought many homebuyers to the market. And while mortgage applications to refinance homes jumped 58% week over week during the second week of September, mortgage-purchase applications rose just 3%.
Reasons for the stall
Industry analysts say there are several reasons homebuying demand isnt yet improving:
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Stubbornly high home prices. The median U.S. home-sale price is up 2.2% year over year, the biggest increase in nearly six months. Thats keeping monthly housing payments elevated despite falling mortgage rates.
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Mortgage rates havent fallen enough. Redfin agents report that many would-be buyers are waiting for rates to fall below 6% before making a movesomething that may or may not happen.
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Lack of homes coming on the market: New listings of homes for sale are essentially flat year over year, as they have been for two months. The total number of homes for sale is up 8.6%, the smallest increase since the start of 2024. With new listings dwindling as home sellers react to the buyers market, house hunters dont have many options.
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Economic uncertainty. Redfin agents say some house hunters are backing off because theyre concerned about potential layoffs, ups and downs in the stock market, and general uncertainty about tariffs and a possible recession.
Redfin agents in certain areas report that people who are moving forward with home-buying plans are making offers with an increasing number of contingencies and are walking if they dont get what they want.
Sellers can play that game, too
Sellers arent showing much flexibility either. With buyers pulling back, sellers are withdrawing as well, and the increase in housing inventory of the summer dried up by August. Zillow reports new listings in August fell to a record low.
While the recent housing market trends have finally started to favor buyers, Zillow Senior Economist Kara Ng says they shouldnt overplay their hand.
"Buyers who can afford a home and have been waiting for the right moment should look closely at what's available now," Ng said. "Options are on the shelves, even if they're not all fresh.
Ng said sidelined buyers should revisit their budget because mortgage rates are lower than in recent years, and in some markets, sellers are more willing to deal.
But don't expect this window of opportunity to stay open indefinitely. Buyers' leverage is easing as many sellers put their plans to list on hold."
Posted: 2025-09-29 12:49:43