Active Listings Rise as Home Sellers Stay Put

Realtor.com’s latest housing report shows new listings dropped 7.5% from a year earlier, while delistings remained close to last year’s pace.

With the holiday season nearing, buyer and seller activity in the housing market is easing along with the weather. As the market moves into its usual slower stretch, a new report suggests buyers are holding back because higher borrowing costs are reducing their purchasing power, while sellers are bringing fewer homes to market without a broad wave of delistings.

In Realtor.com’s October housing report, new listings were down 7.5% year over year, the sharpest decline of the year, while 4.4% of active listings were delisted, compared with 4.6% a year earlier. The preliminary share of listings with price cuts was 20.5%, only 0.2 percentage points higher than last year and lower than in the previous month.

Meanwhile, the number of homes under contract fell 10.5% year over year, the largest drop in nearly three years, as buyers stepped back.

“The market is cooling on both sides, but in different ways. Buyers are stepping back as higher mortgage rates cut into their buying power, while sellers are listing less often without a broad increase in delistings or price cuts,” said Danielle Hale, chief economist at Realtor.com. “We’re seeing a pause in new supply, but owners who already have homes on the market appear to be largely unphased.”

The national median list price stood at $415,000 in October, down 2.2% from a year earlier and marking the 12th straight month of annual declines. Active inventory increased for a fourth consecutive month, narrowing the national supply gap to 6.7% below typical pre-pandemic levels, the smallest gap since the pandemic began, according to the report.

Buyers pull back as supply grows

Realtor.com said the stock of homes under contract fell 10.5% year over year for a third straight monthly decline, the steepest annual drop since October 2023. Thirty-year mortgage rates averaged 7.33% in October, 110 basis points above a year earlier, adding pressure to buyers’ budgets.

At the same time, 357,000 new listings came onto the market, down 7.5% from the same month a year earlier. Even with fewer new listings, active inventory rose to 1,183,500 homes, up 7.4% year over year and the fastest annual increase in eight months. Part of that acceleration reflects easier comparisons with the prior year, while active listings have also increased each month since February. National inventory is now 6.6% below typical pre-pandemic levels, the narrowest gap since the pandemic.

Sellers are pausing, not leaving

Sellers did not respond to softer demand with a major wave of withdrawals, the report found. Delisted homes increased 2.7% year over year, but the delisting rate — delistings as a share of active listings — held at 4.4%, versus 4.6% a year earlier. The rate rose from about 4.0% in the previous month, matching the usual seasonal increase heading into fall.

Price cuts remained common, though their share eased from the previous month. A total of 20.5% of active listings had price reductions in October, down 0.3 percentage points from the prior month and 0.2 points above a year earlier. That was the highest October share since 2022 and the second-highest level of the year.

“Rates eased to 7.24% on Oct. 29, down from 7.40% in mid-October, but they remained 107 basis points above a year ago and 53 basis points above early September. That loss of purchasing power is showing up first in demand: The stock of homes under contract is down over 10% year over year, while the rate of contract signings fell 17% year over year,” said Jake Krimmel, senior economist at Realtor.com.

As the market enters the holiday months, the interplay between inventory and prices will be a key test, Realtor.com said. More homes for sale and slower sales can lift supply, but if sellers avoid deeper price cuts, buyers may not benefit as much as inventory growth alone might suggest.

“On the seller side, we see more of a pause than an exodus,” said Krimmel. “New listings are down at a time of year when activity is already seasonally low, but the share of listings with price cuts is only 0.2 percentage points above last year and slipped from September. We also haven’t seen a meaningful increase in delistings. As we approach the holidays, a seller pulling a listing around Halloween or Thanksgiving is not necessarily showing the same distress as one who exits in midsummer.”