Where have all the houses gone?
The supply of houses for sale in August fell by the largest seasonally-adjusted rate in more than two years, according to the latest report from Redfin. They rose almost 10% from a year earlier, but that’s the smallest year-over-year increase since March 2024.
Active listings now total just 1.94 million. At the current sales pace, they could be wiped out in just 3.3 months. A five-to-six months supply is considered normal.
Brand new listings were down, too. They declined 2.6% year-over-year and fell 1.1% from July to the lowest seasonally-adjusted level since January last year.
The unease that has rattled buyers has spilled over to sellers, says Chen Zhao, head of economics research at Redfin. The company now expects this year’s sales to match last year’s, “the worst year for sales since 1995.”
If the real estate brokerage firm is on target, that means only 4.05 million houses will change hands in 2025.
Even though the recent roll down in mortgage rates has boosted buying power, Redfin has yet to see any measurable bump in sales. The drop in rates has triggered a rise in refinancing activity among existing owners, but many prospective home buyers are still waiting for rates to fall further.
If loans costs continue to slide, buyers might enter the market in larger numbers, said Zhao. “If we get a stronger-than-expected fall housing market,” the economist said, “existing-home sales could end this year a little higher than last year.”
Beth Behling, a Redfin agent in Chicago, thinks she’ll see “a flood of interest” if rates dip to 6%, That’s her “magic number,” she said, noting that buyers are paying strict attention to mortgage rates and waiting for them to continue their descent.
Meanwhile, Redfin also reported that it took 47 days to sell a house in August. That’s up eight days from a year ago. Furthermore, the share of houses selling above their asking prices dipped 3.3 points to 26.9%, and the average list-to-price ratio was down half-a-point to 98.8%.
Also, 15% of pending sales fell out of contract.
