Home sellers in the United States are now struggling to find buyers as mortgage rates remain elevated.
At least 61.9% of homes that were on the market in May had failed to go under contract for at least 30 days, which means the listings are now considered "stale," according to a new report from Redfin. That figure is up 60% from the same period in May 2023 and about 50% in May 2022.
Additionally, two in five (40.1%) of homes on the market in May had been listed for at least two months without going under contract. While that remains unchanged from May 2023, it is up by 27.8% compared to May 2022.
Part of the reason why sellers are struggling to attract buyers is the country's elevated mortgage rates. The average 30-year fixed mortgage rate is 6.95% in the week ending June 13, per Freddie Mac. That is double the pandemic-era low and just slightly below the record 7.8% in October 2023.
Elevated mortgage rates, in combination with high home prices---which is $360,681, per Zillow---have priced many potential home buyers.
"Buyers aren't matching sellers' uptick in activity," Olsen reiterated. But how do we know sellers are making a comeback? New listings rose roughly 8% in May and close to 13% from a year earlier. "The effects of 'rate lock,' owners holding on to their existing homes and low-rate mortgages, appear to be lessening over time, even as most outstanding mortgages have a rate well below what's currently being quoted on the market," Zillow's chief economist Skylar Olsen wrote in a recently published monthly housing report.
Where Home Listings Are Becoming the Most "Stale"
The share of inventory sitting on the market for more than a month is growing fastest in Dallas, Texas. A bit over 60% of all homes listed on the market in May had been listed for at least 30 days.
Following Dallas is Fort Lauderdale, FL, where 75.5% of homes on the market in May had been listed for 30-plus days; Tampa (68.7%), and Jacksonville (69.2%).
In contrast, homes are the least "stale" in Seattle, where only 41.2% of properties on the market in May sat for at least 30 days. That is down from 50.5% a year earlier. Following Seattle are Las Vegas (55.9%) and San Jose (34.4%).
