In terms of homes going on the market and being sold, things are speeding up – and slowing down. On average, homes are selling at their slowest pace since the start of the pandemic, even as sellers rush to list their homes on the market.
Though mortgage rates and home prices remain high, lock-in effects may appear to be loosening, according to a new report from digital real estate brokerage Redfin.
Concurrently, there appears to be an acceptance on the part of sellers that mortgage rates are what they are for the time being, driving more sellers across the U.S. to list their homes for sale.
The latest data show that newly listed homes were up 10.8% from a year ago, “making it the busiest January in terms of new listing activity since 2021,” according to Realtor.com.
“While [mortgage] rates remain elevated, it is possible that we might be seeing that ‘chiseling effect’ starting as sellers may grow tired of waiting for significant changes in rates,” surmised Realtor.com Chief Economist Danielle Hale in her January monthly housing report.
Further, “while the lock-in effect remains a factor for many sellers, the strength of the effect is gradually waning,” Hale added.
To sum up, looking broadly at the situation, stated Realtor.com: “While home sellers are eager to sell, it seems that homebuyers are still hesitant to buy.”
Info from Redfin supports that same outlook. “Sales are slow because it’s very expensive to buy a home, with mortgage rates sitting near 7% and home prices up 4.8% year over year,” according to Redfin. The median monthly housing payment was $2,753, sitting just below a record high in April 2024.
“Additionally, extreme weather – including snow and frigid cold in the Midwest, South and Northeast and wildfires in southern California – are keeping would-be buyers at home,” Redfin stated.
As of the four weeks ending Jan. 26, 2025, U.S. homes that went under contract sat on the market on average for 54 days before the seller accepted an offer, the longest time since March 2020 and seven days longer than at this time last year.
The typical home-listing-to-purchased “loop” shows a big change from the last few years. At this time in 2022, Redfin noted, during the pandemic-driven homebuying boom, typical homes were selling in 35 days, or nearly 20 days faster than they are now.
Also, according to Redfin’s data, pending home sales were down 9.4% year over year, the largest decline since September 2023.
Does this all signal a buyer’s market? Across the U.S., there were 5.2 months of supply on the market, according to Redfin, which is the most since February 2019 and up from 4.9 months a year earlier.
“Months of supply” is the length of time it would take for the existing supply of homes to be purchased at the market’s current sales pace, where a longer span means homes are sitting on the market longer and signals, indeed, a buyer’s market.
Still, all this doesn’t present the full picture regionally, as certain localities have continued to struggle with home inventory availability.
Ellen Litt, a mortgage originator at Bristol County Savings Bank serving the south shore of Massachusetts, told NMP, “We have plenty of homebuyers right now, but no homes to put them in.”
