Why Homes Are Sitting Longer on the Market & What It Means for Buyers and Sellers

Why Homes Are Sitting Longer on the Market & What It Means for Buyers and Sellers

The real estate market is shifting, and if you've been paying attention, you've likely noticed that homes are sitting on the market longer than they have in years. With high mortgage rates impacting affordability and seasonal slowdowns playing a role, both buyers and sellers are feeling the effects. Whether you're looking to buy or sell, understanding the market trends can help you make informed decisions.

Why Are Homes Taking Longer to Sell?

The numbers tell the story—homes are spending more time on the market than in the past five years. According to the National Association of Realtors (NAR):

• The median time for a home to sell has increased to 41 days, up from 35 daysin December and 36 days this time last year.
  
• This marks a significant shift from the fast-paced market seen in previous years.

Key Factors Behind the Slow Down

1. ​High Mortgage Rates
   
   • The biggest culprit is high mortgage rates. The average 30-year fixed mortgage rate is 6.85%, slightly lower than last month’s 7%+ range but still high enough to keep some buyers on the sidelines. Many potential homeowners are hesitant to buy, waiting to see if rates drop further.
     
2. Seasonal Trends
   
   • Winter is always a slower season for real estate. Shorter days and harsh weather conditions make it less convenient for buyers to tour homes and complete moves. Additionally, some homes have been sitting since last summer, adding to the growing inventory of available properties.
     
3. Market Shifts
   • Looking ahead to spring, there’s cautious optimism that buyer activity will pick up. However, only 26% of listing agents expect an increase in buyer traffic over the next three months, compared to 36% last year. Sellers may need to adjust their strategies accordingly.
     

More Inventory, Fewer Sales—A Shift Toward a Buyer’s Market?

​One of the most notable trends is that inventory is growing while sales are slowing:

• The number of homes on the market is up 16.8% from last year.
  
• The number of sales has dropped 4.9% in the past month alone.
• In the Western U.S., sales declined by 7.4%, the sharpest drop of any region.

What Does This Mean?

• ​Buyers now have more choices and stronger negotiating power than during the peak seller’s market.
  
• Sellers need to price competitively, stage their homes effectively, and consider buyer incentives to stand out in a crowded market.
  

The Lock-In Effect & Future Market Predictions

​Another major factor influencing market trends is the lock-in effect—many homeowners are choosing to stay put rather than sell, simply because they don’t want to give up their ultra-low mortgage rates from previous years.

• ​If you bought your home when rates were at 2-3%, the thought of switching to a 6-7% rate is understandably discouraging.
  
• However, Fannie Mae has revised its 2025 forecast upward, expecting a 2.9% increase in home sales over last year.
  
• Mortgage applications have also seen a small uptick, suggesting some buyers are adjusting to the new normal.
  

What Should Buyers & Sellers Do Now?

​For Buyers:

• ​Take advantage of increased inventory.
  
• Negotiate on price and ask for seller concessions.
• Consider properties that have been sitting longer, such as luxury homes, waterfront properties, and acreage properties.
  

For Sellers:

• ​Stay flexible with pricing and strategy.
• Stage your home well to attract buyers.
  
• Offer competitive terms, such as covering closing costs or providing rate buy-down options.
  

Final Thoughts

While the market has slowed, that doesn’t mean there aren’t opportunities—it just means you need a solid strategy. Whether you're looking to buy or sell, staying informed and working with a knowledgeable real estate professional can help you navigate these shifting conditions. If you're thinking about making a move, let’s chat about how to position yourself for success in today’s market!