Last month brought the highest housing supply since January 2020. But buyers aren’t biting, feeling economic uncertainty and perhaps – as some sellers also do – that home prices could be at a peak.
According to a report released February 13 from real estate brokerage Redfin, last month saw the highest home inventory nationally since 2020 – and simultaneously the lowest buyer demand, as mortgage rates hit a monthly average of 6.96%, up 0.24 percentage points compared to December and 0.32 percentage points from a year earlier.
“Economic fears have been top of mind for people. I have sellers saying, ‘I think we're at the top of the market – I’m ready to cash out and put my money into another investment,’” stated Charles Wheeler, a Redfin agent in San Diego, California, in a release.
Homes sat on the market for an average of 56 days before selling – the longest of any January in five years. And, “it’s worth noting that price growth is roughly back to where it was before the pandemic, growing 4%-5% a year, as opposed to the double-digit increases seen in 2021-2022,” according to the report.
Thus, thanks to that home price appreciation, it costs a good deal more now to buy the same house than it would have back then in 2020.
Redfin summed up the situation: “Sellers are making moves because they’re tired of waiting for mortgage rates to fall, but buyers are skittish amid economic uncertainty and rising home prices, which are up 4% from last year.”
The info ties with what others have been finding as well. Market activity was “sluggish” to start the year, reported Bright MLS, a real estate multiple listing service, as mortgage rates have remained high and economic and political uncertainty may be causing some to reevaluate the timing on a home purchase or sale.
Specifically, according to Bright MLS’s Mid-Atlantic region data, new contract activity slowed in January, with about 15,000 new pending contracts last month, down 5.2% compared to a year ago.
Some key figures from Redfin’s latest report include:
- There were 1,795,951 seasonally adjusted, total active home listings as of January 2025, a nearly 13% increase from January 2024.
- New home listings, seasonally adjusted, were at 564,642, up 4.7% from January 2024.
- The median sale price for U.S. homes in January was $418,581, up 4.1% from January 2024.
- Pending home sales, seasonally adjusted, stood at 455,163, down 6.3% from a year ago.
“Buyers should know that they have a bit more negotiating power because there are more homes hitting the market,” Redfin’s Wheeler noted. “Sellers should know that since buyers have more negotiating power, they should make sure their home is polished and competitively priced if they want to sell it quickly.”
