Imagine scanning real estate sites for a house in a bustling city, only to find far fewer options than last year. Across the U.S., sellers are pulling listings at a notable rate, with active homes for sale dropping 20% from their recent peak in July 2024 to levels not seen since before the pandemic. This trend marks a significant delisting wave, as properties linger longer and owners hold off on marketing them. Data from real estate trackers shows inventory fell to around one million homes nationwide by late 2025, down sharply from the 1.3 million available a year earlier.
Sunbelt cities bear the brunt of this shift. Places like Austin, Texas, and Phoenix, Arizona, have seen some of the steepest declines, with listings in Austin plunging 30% year over year and Phoenix following close behind at 28%. High mortgage rates hovering near 7% play a big role here; many homeowners locked in rates below 4% during the low interest era feel little urge to trade up and face today’s costs. Add in strong local job markets that keep residents planted, and you get owners opting to renovate rather than relocate, tightening supply further. Nashville and Atlanta report similar patterns, where price growth outpaced the national average, prompting sellers to wait for even higher offers.
Rates explain part of it, but local factors amplify the squeeze. In Florida metros like Tampa and Orlando, insurance premiums have spiked 40% in two years due to hurricane risks, making some owners hesitate to list amid repair fears. California markets, including San Diego and Sacramento, face regulatory hurdles and high property taxes that slow sales. Nationally, the “lock-in effect” traps about 80% of homeowners with sub-6% mortgages, reducing turnover by 15% compared to normal cycles. Buyers compete fiercely, pushing median prices up 5% to $420,000 despite slower sales.
Not every corner feels this pinch the same way. While urban and suburban hotspots dry up, buyers flock to more affordable pockets. Midwest cities like Indianapolis and Kansas City see listings hold steady or rise slightly, with inventory up 5-10% as lower costs draw remote workers. Ohio’s Columbus market stands out, where homes sell faster than average and new builds fill gaps. Even parts of the Northeast, such as Buffalo, New York, report 12% more listings, fueled by migration from pricier coasts and steady manufacturing jobs.
Rural and exurban areas gain ground too. Towns in Idaho’s Boise suburbs and Tennessee’s Chattanooga outskirts attract families seeking space without city premiums, with sales volume climbing 8% year over year. Investors eye these spots for rental demand from young professionals priced out of metros. This redistribution hints at broader changes in how Americans weigh cost, climate, and convenience when picking homes.
What does this mean for the market ahead? Builders ramp up in underserved zones, adding 1.5 million units projected for 2026, which could ease pressure in growing areas. Yet if rates dip, pent-up urban sellers might flood listings, balancing things out.Â
