U.S. Home Prices Rise Despite Record Seller Surplus

U.S. home prices remain elevated despite rising mortgage rates and a significant surplus of sellers. In September, active listings reached 1.5 million while buyers dropped to 929,000, creating a gap of nearly 600,000—the largest since 2013. Mortgage rates have climbed to 7.4%, yet the median home price rose 8% since November 2023 to $417,500.

Redfin data shows that while a fifth of sellers have dropped asking prices and nearly half are offering concessions, many owners are delisting properties rather than accepting lower offers. This trend is particularly acute in Chicago, where 18% of homes were pulled from the market in September. This resistance is attributed to a stable job market, low delinquency rates, and record home equity, which currently stands at 72% of total housing value.

Regional disparities exist, with pockets of distress appearing in the Sunbelt. In Austin, Texas, home values have fallen 27% from their 2022 peaks. Analysts suggest that without a recession to force more motivated sellers into the market, housing affordability will only improve slowly as incomes potentially outpace home values.