More homeowners are holding off on selling as the housing market cools, fueling the largest decline in home listings in more than two years. New listings of homes for sale dropped 12% year over year during the four weeks ending August 7, the steepest decline since June 2020. Homeowners are staying put in part because homebuyer demand has slowed due to higher mortgage rates; pending home sales are down 16% from a year ago. Some homeowners are also experiencing an effect called “rate lock in” in which they’re hesitant to buy a new home since it would mean paying a significantly higher mortgage rate.
Despite the decrease in new listings, overall housing supply continues to grow—a sign that homebuyers are pulling back more than home sellers. The total number of homes for sale is up 4% year over year. That’s good news for the buyers who can afford to remain in the market because it means the housing shortage is easing and there are more homes to choose from.
“Buyers are backing off due to rising housing costs and sellers are holding back because they realize they won’t get the bidding war they would have gotten six months ago,” said Redfin Deputy Chief Economist Taylor Marr. “The good news is this is bringing balance to the market. If mortgage rates resume their downward trajectory, more buyers and sellers could get back in the game.”
Unless otherwise noted, the data in this report covers the four-week period ending August 7. Redfin’s housing market data goes back through 2012.
Refer to our metrics definition page for explanations of all the metrics used in this report.
