Housing Market Is Stuck in a ‘Cruel Summer’ as Buyers Hold Back and Delistings Surge—but Signs of Hope Emerge

With Labor Day fast approaching, homebuyers, sellers, and builders are all reckoning with what has proven to be a cruel summer for the U.S. housing market, defined by frustrated expectations.

This summer, would-be buyers and sellers found themselves in a stalemate, with neither side willing to budge, but for different reasons. The result: Nationwide housing inventory has climbed for 21 straight months, while sales sit at their lowest level in decades, according to the July housing market trends report from Realtor.com®.

“It’s the Anna Karenina housing market: Everyone is unhappy, but each in their own way,” says Realtor.com senior economist Jake Krimmel. “Buyers face steep affordability barriers. Sellers are losing market power but are futilely resisting. Builders are now pulling back even as the nation remains short of 4 million homes. And regional markets are dysfunctional in their own unique ways.”

Krimmel writes in a new report, which offers an overview of the disappointing summer selling season, that any step forward has been followed by a step backward, leaving the housing market essentially deadlocked. 

On the one hand, according to the economist, booming inventory has made it the most buyer-friendly summer in years, but economic uncertainty and affordability challenges have kept house hunters firmly on the sidelines. 

On the other hand, longer time on the market has prompted many sellers to delist their properties, denying would-be buyers fresh options that might have drawn them back into the market. 

And then builders are pulling back due to waning buyer demand, and in doing so, deepening the nation’s persistent housing shortage. 

“The result is a market in stasis, grinding through a cruel summer,” says Krimmel.

So let’s take a closer look at who is feeling the pain in today’s housing market, the reasons behind it, and the silver linings promising some relief.

Buyers’ double whammy of high prices and rates

Prospective buyers have found themselves facing major affordability headwinds this summer, fueled by elevated home prices and interest rates. 

With the median list price hovering around $440,000, buying a typical home today costs $1,255 more per month than in 2019, when factoring in mortgage payments, estimated taxes and insurance, and a 20% down payment, according to Krimmel. 

The reason for this surge in costs is twofold: home price appreciation over time and high interest rates. 

For example, between July 2019 and July 2021, the median list price saw an increase of nearly 19%, but the typical monthly payment grew by only half as much because mortgage rates were low at the time. 

Since 2021, prices grew by 16%, while monthly payments jumped a staggering 60%, driven by higher interest rates. 

From July 2022 to July 2025, the median list price shed just $4,000, saving buyers a mere $23 per month. But at the same time, interest rates increased from 5.41% to 6.72%, adding about $293 to monthly housing costs.

And even though incomes have seen stable growth in the past few years, the elevated housing costs have eroded consumer buying power.  

This is bad news for the housing market as a whole, because buyers weighed down by high prices and rates are reluctant to snap up homes, keeping sales down this summer.

But there is a glimmer of hope on the horizon in the form of anticipated Federal Reserve rates cuts, which will provide some short-term payment relief, before growing demand pushes prices upward again. 

Another silver lining is that the rent growth has cooled, offering current renters some reprieve as they defer their dream of homeownership. 

Stubborn sellers turn to delisting

This summer has been the least seller-friendly in nearly a decade, weighed down by a combination of rising inventory, days on the market, and price cuts. 

But despite clear signs of softening buyer demand, median list prices have remained virtually flat since spring 2022, signaling that many sellers continue to cling to yesterday’s top-dollar expectations. 

Krimmel says that, finding themselves having to negotiate from a position of weakness, thousands of sellers have opted to call it quits, rather than compromise on price.

“Delistings are growing faster than inventory overall, and in some markets, for every two or three fresh listings, one home is being pulled,” notes the economist. “It’s a way for sellers to reassert control in a market where their leverage is fading.”

Miami led the nation in delistings in June, with 59 for-sale homes yanked off the market per 100 new homes listed, the highest ratio across the top 50 U.S. metros. 

This trend spells bad news for overall inventory growth, which has been losing steam month over month since April.

“Just as the market has begun to tilt in a more buyer-friendly direction, frustrated or stubborn sellers temper supply and keep prices from falling more sharply,” says Krimmel.

The result: fewer sales compared with a year ago and, in many metros, a persistent lack of affordability despite fading buyer demand.

Here’s the good news: Motivated sellers in the more competitive Northeast and Midwest metros can still walk away with healthy profits.

And those who choose to delist may be making a smart move, exercising patience and a willingness to wait out the slump rather than cut prices.

Unlike in the past, when falling prices drove underwater homeowners to panic-sell, today’s homeowners are sitting on record-high levels of home equity.

“In effect, delisting is a luxury,” concludes Krimmel. “And it’s also a sign sellers are not panicking and the market, despite tepid demand, is far from crashing.”

Ana Bozovic, a Miami-based real estate agent and founder of Analytics Miami, recently told Realtor.com that the uptick in delistings in Miami is representative of the city’s “long-term hold market.”

“If sellers are choosing to take properties off the market rather than lower prices, it may signal renewed confidence in Miami’s future and a growing belief that this is a market worth holding for the long haul,” she noted.

Disillusioned builders pull back

After the heady days of the COVID-19 pandemic-era construction booms, builders today are facing three major challenges: sagging buyer demand, elevated financing costs, and inflated prices of building materials due to President Donald Trump‘s tariffs on imported goods.

According to the latest available data, sales of new single-family homes not yet started have reached an all-time high in June, up 19% year over year, while single-family permits fell almost 8% in July compared with the same period in 2024.

“With demand and house prices languishing in the most builder-friendly regions, builders are becoming increasingly reluctant to even begin construction,” says Krimmel.

Given America’s shortage of 4 million homes, this builder pessimism does not bode well for the overall housing supply. However, the prospect of lower interest rates holds the promise of increased buyer demand and lower financing costs.

The most recent residential construction data for July indicates that single-family starts picked up, but permits, the more forward-looking metric, fell 5.7% from a year ago.

America’s divided housing market

It’s important to remember that the U.S. housing market is not a monolith, and this summer’s selling season looks very different depending on the region.

In the South and West, there is an overabundance of for-sale homes and extremely muted demand, thanks to the pandemic-era price boom and higher interest rates. Meanwhile, in the Northeast and Midwest, it’s almost the exact opposite: Inventories are low and demand is high.

In fact, homes in those two chronically undersupplied regions are selling one to two weeks faster than before the pandemic, despite mortgage rates stuck in the 6% to 7% range and still-rising prices.

“In effect, there’s a supply and demand imbalance everywhere, but coming from opposite sides of the equation,” says Krimmel. “Too much supply relative to demand in the South and West, still too little in the Northeast and Midwest.

This sharply divided housing market makes the national data harder to decipher for consumers, lenders, builders, policymakers, and market analysts. Krimmel warns that interpreting the conditions solely through national averages risks overestimating softness in the Midwest and Northeast while underestimating the correction underway in the South and West.

“In this case, you really need the trees to see the forest,” adds the economist. “Looking to the future, jumpstarting the housing market nationally may actually require different antidotes depending on the region.”

When taking the regional differences into account, pockets of opportunity emerge for buyers in the well-supplied South and West, and for sellers in inventory-starved Northeast and Midwest.

Taken as a whole, the cruel summer housing market of 2025 is defined by frustration and hesitation from all parties—buyers, sellers, and builders—driven by a mismatch between expectations and reality.

But Krimmel says the market is really just gradually recovering from historical extremes and rebalancing itself over time.

“And although not without frustration, our current path, however gradual, is far less painful than a faster, more catastrophic alternative,” he notes.

Looking ahead, the economist predicts steady progress, with rising inventory, increased new construction, and easing rates—all contributing to a more stable market.