Housing market hits a whole new problem | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Let’s face it, 2025 hasn’t been too kind to anyone on either side of a housing deal.

The housing market has been facing high rates, constrained inventory, and affordability issues.

Now, it’s facing a new problem that few expected, in that sellers are walking away in droves.

According to a recent Realtor.com report, delistings surged 45.5% year to date, jumping nearly 38% from October 2024.

For perspective, that’s the highest rate since tracking began in 2022. In essence, sellers aren’t waiting for spring or better conditions; they’re giving up entirely, rather than cutting prices to a small pool of rate-stressed buyers.

Throw in the surge of canceled contracts and the rise of “refuge markets,” and the picture becomes a lot more confusing.

This doesn’t seem like a typical slowdown, where both buyers and sellers are checking out for different reasons, leaving the recovery story wobbling before it starts picking up speed.

A surge in delistings shows homeowners retreating from the market.

Photo by Hispanolistic on Getty Images

Delistings surge to record levels

The report is especially concerning because sellers aren’t just hesitating; they’re bailing out at a record pace.

The delistings increase to 45.5% year to date, a spike that’s usually reserved for the coldest months.

Moreover, nearly 6% of active listings are coming off the market each month, a notable retreat where homeowners aren’t willing to trim prices due to a weak buyer pool.

Similarly, Redfin reports that nearly 53,000 home-purchase agreements were canceled in October, covering 15.1% of homes that went under contract, up from 14.3% the previous year.

San Antonio: 21% of pending home sales falling through
Fort Lauderdale, FL: 20% cancellations
Fort Worth, TX: 19.7% cancellations
Las Vegas, NV: 19.2% cancellations
Jacksonville, FL: 19.2% cancellations.

Buyers flee to “refuge markets”

Sellers are pulling back, but buyers aren’t sticking around in pricey metros, either.

In fact, buyers are effectively redirecting their searches to what Realtor.com calls “refuge markets.”

Put simply, these cities still offer a chance at affordability.

Think of areas like Grand Rapids, where prices increased 5.5% year over year, or St. Louis, up 5%, along with Cleveland, Milwaukee, and Pittsburgh, all of which remain 20% to 30% more affordable than the national median.

Further, shoppers are trading coastlines and boomtowns for much smaller markets where monthly payments wouldn’t blow up their budgets.

The market math still isn’t adding up

There’s plenty of churn happening under the surface, but the deeper forces impacting the housing market are stubbornly unchanged.

Though the rates have drifted off their highs, and the Fed is cutting, the fundamentals don’t feel any easier on the ground.

Here’s the reality of the housing market space:

Money is still expensive: Even following a couple of Fed cuts, the effective funds rate is around 3.9%, while the 30-year mortgage rates are hovering near 6.19%, never dipping below 6%.
Confidence is wobbling:Unemployment jumped to 4.4% in September, as payroll gains cooled to 119,000, while the Conference Board’s confidence index plummeted to 88.7, a seven-month low.
Affordability hasn’t budged: Existing-home sales are up 1.7% year-over-year, but inventory at 4.4 months’ supply is still remains tight, while the median price of $415,200 remains more than 36% over pre-pandemic levels.
Prices stay sticky: FHFA data shows home prices rose another 2.3%, which still keeps monthly payments punishing.

A calmer market ahead if confidence shows up

In an interview with Yahoo Finance, Realtor.com senior economist Joel Bernerfeels that 2026 will be more like a reset than a rebound.

As he puts it, “Really, we see 2026 as a year of steadying across a lot of dimensions of the housing market. Mortgage rates are one piece of that.”

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His team expects average mortgage rates to hover at nearly 6.3%, slightly behind this year’s levels but with significantly fewer swings.

At the same time, Berner sees home prices rising just 2.2%, at a sluggish pace in comparison to both inflation and income growth, quietly boosting affordability.

Sales are forecasted to tick up just 1.7%, while the houses for sale could rise approximately 9%, offering buyers greater leverage. However, Berner notes that the economic uncertainty is keeping people on the sidelines.