Redfin's Fairweather on Why Unsold Properties are Leaving the Housing Market

Core Insights - The housing market is experiencing a stalemate where sellers are withdrawing listings due to high prices and mortgage rates, while buyers are unable to afford homes at these prices [2][3][15] Supply and Demand Dynamics - Sellers are taking homes off the market at the fastest pace in nearly a decade, primarily because they are unwilling to lower their asking prices [1][2] - Active listings are up, but true supply is tighter than it appears, as many homes are overpriced and sellers are not negotiating [8][9] - In markets like Florida and Texas, sellers are more likely to withdraw listings due to price competition, while in areas like New York, sellers are satisfied with offers and keep their homes on the market [6][7] Buyer Behavior - Buyers are increasingly opting to rent instead of purchasing homes due to affordability issues, leading to a decrease in demand [8][12] - The escrow period often leads to complications that can cause deals to fall apart, as buyers may discover additional costs that sellers are unwilling to cover [12][13] Interest Rates and Market Movement - A reduction in interest rates would likely help align the interests of buyers and sellers, as sellers are holding out for higher prices to offset the impact of high rates on their next home purchase [15][16] - Current interest rates are still too high to significantly stimulate market activity, with a need for rates around 5% for a meaningful change [16]