Buyer Freeze: Over 60% Of Homes Linger On Market Amid Soaring Prices And High Interest Rates

Skyrocketing home prices and elevated interest rates are keeping buyers on the sidelines, with the result that more than three in five houses on the market in May were listed for at least 30 days, according to a report by real estate brokerage Redfin.

The average 30-year fixed mortgage rate is 6.99% — more than double the lows seen during the pandemic and slightly below the 20-year high of 7.8% in October 2023. The median U.S. monthly housing payment is about $30 less than its record high.

Since March, the proportion of homes remaining on the market for at least a month has increased. The trend began when new listings surged but buyer demand remained weak, a pattern seen since mortgage rates started climbing in 2022. Consequently, the lingering less desirable listings are not finding buyers.

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In May, two in five listings sat on the market for 60 days or more without going under contract. That's the same as a year ago and up from 27.8% two years earlier.

Although many houses sit on the market for longer, demand still outstrips supply, keeping prices high.

"You're not going to see house prices decline," Rick Arvielo, head of mortgage firm New American Funding, told Bankrate. "There's just not enough inventory."

The median price of $407,600 in April is lower than the all-time high of $413,800 but it's still the highest April median on record, according to the National Association of Realtors (NAR).

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"Prices will remain firm and will not decline on a national level," NAR Chief Economist Lawrence Yun told Bankrate.

The proportion of inventory lingering on the market for at least 30 days is growing rapidly in Dallas. In May, more than 60% of homes on the market in the city had been listed for longer than 30 days, up from 53% a year ago.

Three Florida metro areas are next. Fort Lauderdale saw 75.5% of listings on the market for longer than 30 days, up from 68.2%; Tampa was at 68.7%, up from 61.9%; and Jacksonville was at 69.2%, up from 62.9%.

According to Redfin, "Inventory is growing stale fast in Texas and Florida largely because those states are building far more homes than anywhere else in the country, contributing to rising supply, and because some homebuyers are nervous about the increasing prevalence of natural disasters."

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