Nearly 5% of home listings were pulled from the market in May, the highest share of delistings for that month since Realtor.com began collecting data in 2022, according to a report shared with ABC News. The figure marks the fourth consecutive May in which the delisting rate has risen.
Realtor.com said in the report that "the consistent upward drift over four consecutive Mays underscores a shift in seller behavior nationally."
The main drivers are high mortgage rates and elevated home prices that have pushed buyers out of the market, leaving sellers with few serious offers. The average interest rate on a 30-year fixed mortgage climbed from 5.99% in late February to 6.6% in early June, according to Mortgage News Daily data. The jump followed the start of the Iran war on Feb. 28, which sent oil prices surging, pushed U.S. Treasury yields higher, and stoked inflation fears that fed directly into borrowing costs.
Susan Wachter, a professor of real estate at the University of Pennsylvania's Wharton School of Business, described the current state of the market to ABC News as a standoff. "This is re-freezing the housing market," she said. "It's a standoff between buyers and sellers."
Ken Johnson, a real estate economist at the University of Mississippi, told ABC News that the sequence of events was straightforward. "Mortgage rates have been going up the last several months so buyers have just thrown up their hands. That led sellers to say 'I'll just take my house off the market,'" he said.
The market had shown brief signs of improvement earlier this year. In February, the average rate on a 30-year fixed mortgage fell to its lowest level in nearly four years, and a National Association of Realtors affordability index pointed to the best conditions for buyers since 2022. Those gains reversed quickly after the Iran war began.
Each percentage-point increase in a mortgage rate can add thousands or tens of thousands of dollars in annual costs for a borrower, depending on the price of the home, according to Rocket Mortgage.
High mortgage rates have also contributed to what analysts call a lock-in effect, where homeowners who secured low rates in previous years are reluctant to sell and take on a more expensive loan for a new purchase. That dynamic reduces the number of homes entering the market even further, compounding the shortage facing buyers and keeping prices elevated despite weakened demand.
