Typical US Home Taking 2 Months to Sell, Slowest Pace in 5 Years, Report Says

A home for sale in San Francisco on May 11, 2023. Justin Sullivan / Getty Images

Homes in the United States sold at the slowest pace in almost half a decade last month as elevated mortgage rates and high prices impacted buyers, according to real estate brokerage Redfin.

For the four weeks ending Jan. 26, “the typical U.S. home listing that went under contract sat on the market for 54 days before the seller accepted an offer, the longest span since March 2020 and a week longer than this time last year,” the company said in a Jan. 30 statement.

“At this time in 2022, during the pandemic-driven homebuying boom, the typical home was selling in 35 days.”

The slow pace of home sales occurred as the average weekly rate for a 30-year fixed-rate mortgage hovered near 7 percent last month.

Sam Khater, chief economist at Freddie Mac, said the rate has been moving between 6 percent and 7 percent for most of the past 2 1/2 years.

Meanwhile, home prices were up by 4.8 percent, with the median monthly housing payment at $2,753, close to the record high in April last year, according to Redfin.

All these factors contributed to making purchasing a home an expensive affair. In addition, “extreme weather—including snow and frigid cold in the Midwest, South and Northeast and wildfires in Southern California—are keeping would-be buyers at home,” the brokerage said.

Homes have been sitting on the market for a longer time, with 5.2 months’ worth of housing supply, the most since February 2019, it said.

Redfin expects the market to pick up in the coming weeks once mortgage rates drop and new listings improve. Some buyers may opt to enter the market, tired of waiting for home prices and mortgage rates to come down, the brokerage said.

“Prospective buyers have been cautious because they’ve seen homes sitting on the market and they’ve heard interest rates and prices may drop. When the market isn’t competitive, some buyers think they should wait for costs to go down,” Jordan Hammond, a Redfin premier agent in Raleigh, North Carolina, said in a statement.

“Now it’s pretty clear that sellers aren’t slashing asking prices and mortgage rates aren’t plummeting, so mindsets are shifting. People are starting to believe that if they want or need to move, and they can afford to, they should do it.”

Affordability Crisis

A recent report from S&P showed that the U.S. National Home Price NSA Index rose by 3.8 percent on an annual basis in November. Of the 20 cities tracked by the index, every city, except for Tampa, registered an annual gain.

“Markets in New York, Washington, D.C., and Chicago are well above norms, with New York leading the way. Unsurprisingly, the Northeast was the fastest growing region, averaging a 6.1 percent annual gain,” said Brian D. Luke, head of Commodities, Real & Digital Assets at S&P.

“However, markets out west and in once red-hot Florida are trending well below average growth. Tampa’s decline is the first annual drop for any market in over a year.”

Elevated housing costs are creating an affordability crisis. According to data from the National Association of Realtors, a median-priced existing single-family home cost $410,900 in November, up from $357,100 in 2021. Homebuyers had to shell out 25.2 percent of their incomes as monthly mortgage payments, up from 16.9 percent.

In a recent presidential memorandum aimed at resolving the cost of living crisis facing Americans, President Donald Trump blamed overregulation from the previous administration for having resulted in “almost $50,000 in costs on the average American household.”

The memo called on government agencies and executive departments to deliver “emergency price relief” to U.S. citizens, including pursuing actions that boost the supply of homes and bring down housing costs.

The U.S. Federal Reserve’s benchmark interest rates are a key factor influencing mortgage rates. Last month, the central bank opted not to cut interest rates, keeping them between 4.25 percent and 4.5 percent. This came after the Fed cut rates multiple times last year.

In December 2024, the central bank suggested that it expects fewer rate cuts this year, citing concerns about inflation. The next Federal Reserve meeting is scheduled for March 18–19.