From Hot Market To Not: Surplus of Unsold Homes Grows Past 60% As High Costs Curb Buyer Enthusiasm

As mortgage rates remain near two-decade highs, the lion’s share of U.S. homes are lingering on the market, with over three in five listings remaining unsold for at least 30 days.

This indicates the persistent slowdown in buyer activity due to escalating housing costs.

According to data issued Tuesday, 61.9% of homes listed in May had not gone under contract after 30 days, an increase from 60% the previous year. According to Redfin, the rise in "stale" listings, fueled by high mortgage rates and soaring home prices, indicates a deepening challenge in the housing market as potential buyers are priced out despite what is typically a peak season for home sales. 

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In response, properties are accumulating mostly in regions like Texas and Florida where new constructions have bolstered supply but not demand, coupled with buyer hesitancy due to concerns over natural disasters.

In May, Dallas saw over 60% of its listings sitting idle for at least a month, a rise from 53% the previous year. Similarly, Florida metros including Fort Lauderdale, Tampa, and Jacksonville are seeing stale inventory rates of 75.5%, 68.7%, and 69.2% respectively, all showing increases from the year before.

Conversely, cities like Seattle, Las Vegas, and San Jose are seeing a decline in the proportion of homes that linger on the market. In Seattle, only 41.2% of homes remained on the market for more than 30 days, down from 50.5% a year earlier. 

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Las Vegas and San Jose also saw declines, with homes sitting for prolonged periods at 55.9% and 34.4% respectively, suggesting stronger market conditions or more effective absorption of new listings.

What About 60-Days?

The report found that 40.1% of homes listed had not found a buyer after 60 days, mirroring the stat from the previous year while marking an increase of 27.8% observed two years earlier. That persistence suggests that while the initial 30-day listing period saw a drop-off in buyer interest, many homes continue to face challenges in attracting buyers even as they linger longer on the market.

Redfin economists note that the static nature of the 60-day stale rate, consistent in both April and May, could indicate an upcoming rise if mortgage rates continue to hold. The trend reflects a deepening normalization of longer listing durations as the new market reality, set against high borrowing costs that deter potential buyers.

On borrowing costs, the typical 30-year fixed mortgage rate remained elevated at 6.98% as of Thursday, much higher than the pandemic-era low of roughly 3% and only slightly below the two-decade peak of 7.8% reached in October 2023.

The level of borrowing cost has substantially reduced affordability, pushing many potential buyers out of the market. According to the report, the median U.S. monthly housing payment is now nearing its historical peak, falling just $30 short of the record high, further complicating the financial equation for many households considering entering the housing market.

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