Have you ever watched a game of chicken where neither driver swerves? That’s pretty much the U.S. housing market right now.
Sellers refuse to drop their asking prices to realistic levels. Buyers refuse to pay 2021 prices with 7% mortgages. The result? A record number of homeowners are simply pulling their properties off the market and walking away rather than compromise. New data shows we just hit an eight-year high for homes being delisted without selling, and honestly, it feels like the calm before something much bigger.
The Great American Housing Standoff Is Getting Ugly
Roughly 85,000 homes were removed from listings in September alone after failing to sell — that’s almost 30% more than the same month last year. Think about that for a second. In a “normal” market, delistings hover in the background. Right now they’re screaming.
I’ve been following real estate cycles for years, and I can’t remember the last time I saw this level of paralysis outside of the 2008-2009 crash period. The difference? Back then prices were collapsing and sellers had no choice. Today many homeowners are sitting on massive equity and ultra-low mortgage rates. They can afford to wait. Or so they think.
Why Are Sellers Giving Up Instead of Cutting Price?
The psychology here is fascinating.
Most of the homes being pulled have already lingered for months. The median delisted property sat on the market for 100 days — that’s more than three months of silence, price drops ignored, open houses with zero visitors. At some point pride, exhaustion, or simple math kicks in: “If I’m not getting offers at this price, I’d rather rent it out or just stay put.”
- Seven out of ten active listings in September were already 60+ days old — stale inventory everywhere.
- About one in six delisted homes were at real risk of selling below the owner’s purchase price plus improvements.
- Roughly half a million more homes are listed than there are active buyers right now.
When you put those numbers together, the decision to delist starts looking rational, even if it grinds the entire market to a halt.
The Mortgage Rate Lock-In Effect Nobody Wants to Talk About
Here’s the elephant in the room: millions of homeowners are locked into 2.5%-3.5% mortgages from 2020-2022. Trading that for a 6.5-7% loan feels like financial suicide, even if they desperately need to move for a job, growing family, or retirement.
I know quite a few people in this exact position. One couple I spoke with last month has a gorgeous four-bedroom in the suburbs with a 2.75% rate. Their payment is $2,100. The identical house down the street is asking enough that the new buyer’s payment would be $4,200 at current rates. Guess who isn’t moving anytime soon?
Multiply that story by literally millions and you understand why new listings remain stubbornly low while existing listings rot on the vine.
“More sellers are giving up because their homes have been sitting on the market for a long time, and they don’t want to — or can’t afford to — settle for a low price.”
Senior economist at a major real estate data firm
Where the Freeze Is Hitting Hardest
Some markets are basically seizing up completely.
Cities that saw the biggest year-over-year jumps in delistings include places you might not might expect alongside the usual suspects:
- Virginia Beach: +74%
- Washington D.C. area: +54%
- San Jose: +53%
- Dallas and Houston both pushing +50%
When even Texas markets — long considered bullet-proof — start seeing half of new listings fail, you know the slowdown has gone national.
The highest share of total inventory being pulled? Sunny Florida cities top the list — Miami, Fort Lauderdale, West Palm Beach — all above 7.5%. A lot of investors and second-home buyers from 2021-2022 appear to be throwing in the towel rather than bleed carrying costs.
Meanwhile, Home Prices Are… Confusing Everyone
Here’s where it gets weird. National home price indices are still creeping higher month-over-month, even as more than half of major metros now show year-over-year declines.
The 20-city composite rose a measly 0.13% in September — basically flat — and the year-over-year gain has collapsed to the lowest level since mid-2023. Yet headlines still scream “prices keep rising!” because the national number hasn’t rolled over yet.
In my view, we’re seeing the classic “fat tail” phenomenon. The few homes that do sell — usually the best-located, best-priced, or heavily discounted — are still pulling decent numbers, keeping the averages propped up. Everything else just sits.
The Airbnb Angle Nobody Is Tracking Closely Enough
I have a hunch a meaningful slice of these delistings are former short-term rentals. Investors who loaded up on properties in 2021-2022 expecting endless 30%+ cash-on-cash returns are now facing occupancy crashes, insurance spikes, and new local regulations.
Rather than dump at a loss, many are either converting to long-term rentals or just taking the listing down until “the market comes back.” I’d love to see someone run the overlap between delisted homes and known short-term rental permits. My bet: the correlation would be striking.
What Happens Next? Three Scenarios I’m Watching
Nobody has a crystal ball, but these are the paths that seem most likely from where we’re standing.
- Soft Landing / Slow Melt
Rates drift down to the mid-5% range by summer 2026, buyers trickle back, sellers slowly accept reality, transaction volume recovers gradually while prices flatten for 18-24 months. Most probable in my opinion. - Forced Selling Wave
Job losses mount, distressed sellers (death, divorce, job relocation) overwhelm the bid side, prices crack in pricing becomes visible by spring, snowball effect. - Dead Cat Bounce Then Drop
Rates fall fast, brief rush of move-up buyers creates illusion of recovery in early 2026, but underlying affordability issues remain, second leg down hits late 2026-2027.
Whichever path we take, the current delisting surge tells me the standoff can’t last forever. Something has to give — either rates, prices, or both.
Should You Buy, Sell, or Sit Tight Right Now?
If you’re a buyer with cash or a low-rate approval and a long time horizon, I actually like the setup. Inventory is high, competition is low, motivated sellers exist even if they’re not advertising it yet. Make low-ball offers — the worst they can say is no.
If you’re a seller who doesn’t have to move, waiting probably makes sense unless your property taxes and insurance are eating you alive. The risk is that “waiting for spring” becomes “waiting until 2027.”
If you’re an investor, I’m leaning hard into professional long-term rental plays in the Midwest and Southeast where cap rates finally make sense again after years of insanity.
One thing feels certain: the housing market we knew from 2020-2023 is gone. We’re in a new regime now — slower, pickier, more regional. The sooner or later the ice will crack. The only question is who’s still standing on it when it does.
Stay sharp out there. The data is getting very interesting again.
