The housing market is seeing its biggest logjam since before the pandemic

The housing market is in the midst of its biggest slowdown since the pandemic, according to Redfin.

The real-estate listings firm cited that 48% of US home listings stayed on the market longer than 60 days in August, the biggest share since 2019.

The figure marks a 43% increase from the year before. It’s also the fifth straight month where the share of homes on the market that long has climbed — a sign that more houses are growing stale as demand cools.

The summer also tends to be a weak month for home sales, adding to the standstill, the report said. Existing home sales slumped another 1% in August to their lowest levels since May 2020, when the housing market shuttered to a halt as the result of the pandemic, the firm said in a separate report.

Towns in Florida and Texas dominated the list of slowest housing markets in the US. Homes stayed on the market for the longest in West Palm Beach, Florida, with listings taking a median 79 days before being sold. That was followed by Fort Lauderdale, Florida, and Jacksonville, Florida, where homes stayed on the market for a median 75 and 65 days respectively.

“We usually see home sales pick up when mortgage rates fall, but this year we are seeing the opposite — sales are dropping and homes are sitting longer on the market,” Sheharyar Bokhari, a Redfin senior economist, said in a statement.

He continued: “Last week’s big interest rate cut by the Federal Reserve will give buyers a boost in confidence, but it remains to be seen whether sales will speed up in any meaningful way as we move into the slower Fall season.”

The central bank cut interest rates 50 basis points at their last policy meeting, which was expected to influence mortgage rates to tread lower. But borrowing costs will probably stay elevated over the near-term, forecasters say, with Redfin predicting the 30-year fixed mortgage rate will remain above 6% by the end of the year.

Still, not all housing markets in the US have grown stale. Seattle was the hottest housing market in the nation last month, with homes staying on the market for a median of 12 days, per Redfin’s report. That was followed by Indianapolis, Indiana, and Warren, Michigan, where homes stayed on the market for a median of 16 and 17 days, respectively.

Buyers may also be pickier about the types of homes they make an offer on, according to Darryl Fairweather, Redfin’s chief economist.

“Anyone who has been paying attention to the housing market over the past few years knows that desirable homes sell right away,” Fairweather said. “Now if a home is still on the market after a few weeks, buyers assume there’s something wrong with it. That’s why it’s so important to price your home to move quickly. Buyers see the days on market and when it starts to tick up, it’s like a scarlet letter.”

More sellers have resorted to slashing prices in a bid to attract buyers. The share of homes that saw a price cut in August rose to over 19%, Redfin said in a previous report, the highest share of homes with a price reduction in August in five years.