Sellers hold firm as buyers pull back, leaving U.S. market stalled

Inventory is building, even as fewer owners list

The market is stuck as buyers back off and sellers refuse to blink. Realtor.com counted 183,500 active listings in October, up 7.4% year over year and marking the fastest eight-month pace of expansion. Since February, the number of active listings has increased each month.

That growth is not coming from a rush of new supply. New listings declined 7.5% from October 2025. After years of unusually thin stock during the pandemic buying surge, national supply now sits just 6.6% below typical pre pandemic levels - the slimmest gap since the pandemic began.

Danielle Hale, chief economist at Realtor.com, said, "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," "We're seeing a pause in new supply, but owners who already have homes on the market appear to be largely unphased."

Sellers are not cutting, and delistings are not rising

Just over 20% of sellers trimmed asking prices in October, roughly matching September and the same month a year ago. There was also no meaningful pickup in delistings.

Demand and affordability are under pressure

Mortgage rates eased a bit from September to October, but they were still more than one percentage point above last year, and that continued to drag on activity. Zillow said newly pending sales - signed contracts, not closings - fell 16.8% from a year earlier, the biggest annual decline since August 2023 and the weakest October since 2018.

Home prices kept moving higher. According to Zillow, with 20% down and excluding taxes and insurance, the monthly payment on a typical U.S. home in October was $2,004. That was 12.8% higher than a year ago and 4.8% above September, the largest month over month increase in four years.

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"November is shaping up to have an even larger contraction, but the silver lining is that next month is likely going to be the worst of it," said Mischa Fisher, Zillow's chief economist. "I expect the pace of the slowdown to ease into the new year. There are deals to be had for buyers able to brave the affordability headwinds in the coming months, and the continued inventory buildup means there is a lot of upside for sales into next year if we get rate relief."

For portfolios tied to housing - from homebuilder stocks to mortgage REITs - the setup is a tug of war between rising active supply and affordability still stretched by high rates. If rate relief shows up, Fisher's read suggests the inventory pile could convert into sales momentum. If not, expect the freeze to linger.

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