• The typical home that went under contract in July sat on the market for 43 days—the longest July span since 2015—as pending sales hit a two-year low.

• Some sellers are reacting by, well, not selling; active listings posted the largest monthly drop since 2023.

• Home prices rose 1.4% year over year, a faster rate of growth than we’ve seen in recent months, likely due to shrinking supply. The good news for buyers is mortgage rates have fallen.

The typical home that went under contract in July was on the market for 43 days. That’s up from 35 days a year earlier and is the longest span for any July since 2015.

Homes are taking longer to sell because demand is shrinking due to high homebuying costs and economic uncertainty. Pending home sales fell 1.1% month over month in July to the lowest seasonally-adjusted level since November 2023, and existing-home sales ticked down to seasonally adjusted annual rate of 4,150,266—the lowest level in nearly a year.

With homes lingering on the market, supply has been building up, giving buyers more options and less urgency. Active listings of homes for sale in July sat near the highest level in five years, but they did fall 1.1% from June—the largest monthly seasonally-adjusted drop in roughly two years. New listings fell 0.4% month over month to the lowest seasonally-adjusted level since March 2024.

“Supply is starting to fall because prospective sellers are choosing not to list after seeing their neighbor’s home linger on the market or sell for below the asking price,” said Redfin Senior Economist Asad Khan. “Some existing sellers are also pulling their homes off the market, opting instead to rent their house out or hold off on a move altogether—especially if they bought at the peak of the pandemic market and are worried about taking a loss.”

Home-Price Growth May Be Accelerating as Sellers Pull Back

The median home sale price rose 1.4% year over year in July to $443,867—the highest July level on record. By comparison, prices rose 0.9% year over year in June and 0.7% year over year in May. This is notable because at the beginning of the year, home-price growth was shrinking.

Buyers have been playing the waiting game for months. Now sellers are playing too, which is likely causing prices to heat up a bit.

The good news for buyers is that while home prices are rising, mortgage payments have started to come down. The average 30-year-fixed mortgage rate now sits at 6.58% after hitting a high of 6.75% in mid-July.

Homebuyer Competition Remains Scarce, And Some Buyers Are Backing Out of Deals

The typical home that sold in July went for roughly 1% less than its asking price—the biggest July discount since 2020. Less than one-third (28.9%) of homes went for more than their final asking price, the lowest July share since 2019. Both of these stats indicate that homebuyer competition, at least nationally, has fallen.

Some buyers are backing out of deals after they’ve already signed a contract; roughly 58,000 home-purchase agreements were canceled in July, equal to 15.3% of homes that went under contract that month—the highest July rate in records dating back to 2017.*

In general, buyers have more negotiating power than they’ve had in recent years because they’re facing less competition and have more homes to choose from. But the balance of power may start to shift back toward sellers if supply continues to shrink.

For now, Redfin agents say it’s critical for sellers to make sure their homes are priced fairly and in good condition if they want to attract buyers. Homes that are overpriced often take a long time to sell.

“It’s a weird market right now,” said Shauna Pendleton, a Redfin Premier real estate agent in Boise, ID. “For the most part, it’s crickets. I recently did a $100,000 price drop on my listing that had sat on the market for several weeks at over $600,000, only to lure one interested buyer. But there are also pockets of competition. I had a fixer-upper listing get seven offers after we priced it aggressively at $320,000.”

*Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in July could have gone under contract in June.