Higher Rates Changed The Housing Market and These May Be the Rules Going Forward, New Realtor.com® Report
Housing Market Defined by New Dynamics, Where Higher Rates, Uneven Supply and High Prices Coexist, Challenging Affordability
Four years into the high-rate era, the data suggest the housing market may be entering a more durable phase defined by higher borrowing costs, uneven supply and persistently elevated prices. According to Realtor.com®, falling rates could ease the lock-in effect and draw more sellers back to the market, but they may also reignite buyer demand, limiting meaningful affordability gains. These competing forces point to a future where housing remains structurally tighter, even as conditions evolve.
"Four years into this higher-rate environment, it's clear that the housing market recalibrated rather than reset," said
Since
"These long-term price gains matter because they compound the affordability hit from higher mortgage rates," said Krimmel. "Even before factoring in borrowing costs, the price side of the equation adjusted much less than most expected, especially in the most supply-starved markets."
Lock In Effect At Heart of Disconnect
At the heart of this disconnect is the lock-in effect. Millions of homeowners remain anchored to ultra-low mortgage rates secured earlier in the decade, limiting the ability to sell. A recent Realtor.com analysis of outstanding mortgages shows that a substantial majority of homeowners still hold rates well below today's prevailing levels, over 50% of borrowers holding rates below 4%. For many households, moving would mean replacing a historically low mortgage with one nearly twice as expensive Looking ahead, the path out of the affordability bind remains uncertain. Falling rates could ease lock-in and bring more homes to market, but lower borrowing costs also risk reigniting demand, a potential catch-22 for buyers hoping for meaningful price relief.
"That's the tension in today's market," Krimmel said. "Lower rates could unlock more supply, but they could also bring buyers back faster than listings recover. The path to meaningful affordability relief depends on supply growing sustainably—not just demand returning. Lock-in removed a lot of discretionary buyers from the market, leaving a lot of people moving out of necessity who were less price sensitive. As those buyers eventually return and list their own home too, that will add some much needed liquidity to the market."
Market is Defined by Deep Regional Differences
The inventory recovery itself has been anything but uniform. Western and Southern markets led the rebound, with active listings up 211% in the West and 178% in the South since
In contrast, inventory growth has been far more muted in the Northeast (+23%) and Midwest (+68%). Some markets, including
|
|
An Uneven Recovery: Changes from January 2022-January 2026 |
|||||
|
|
Active Listings, |
Median List |
Median List |
Median Days |
New Listings, |
Price Reduced |
|
|
142.1 % |
8.1 % |
11.5 % |
19 |
1.7 % |
8.2 |
|
Northeast |
22.4 % |
15.3 % |
17.5 % |
2 |
-13.5 % |
2.8 |
|
Midwest |
67.1 % |
22.0 % |
18.8 % |
11 |
-10.3 % |
4.2 |
|
South |
213.7 % |
7.4 % |
12.1 % |
23 |
9.1 % |
9.6 |
|
West |
180.0 % |
2.2 % |
3.8 % |
30 |
2.7 % |
10.6 |
Despite these stark regional differences, and despite the sheer volume of new supply in many metros, price declines remained rare and shallow. Only eight major metros posted declines in list price per square foot relative to
"What we've learned is that the laws of supply and demand still apply, but the relationship has weakened," said Krimmel. "Even a flood of listings and much higher financing costs weren't enough to generate broad-based price relief."
Four Years of Higher Rates Affects Home Prices
On the whole, and especially recently, inventory has grown due to longer time on market for existing listings rather than inflows of new listings. In 2021 and early 2022, new listings accounted for roughly 85% to 90% of active listings in a typical month nationwide. Homes moved quickly (59 days in
|
|
|
|
|
|
|
|
Ratio of New Listings to |
85.9 % |
46.5 % |
44.3 % |
39.4 % |
36.1 % |
|
Median Days on |
59 |
72 |
69 |
73 |
78 |
"This shift indicates that the rise in active inventory has been driven less by a steady stream of new sellers entering the market and more by homes remaining listed for longer periods," said Krimmel. "Sellers are patiently testing price levels and waiting for buyers, rather than pricing aggressively to move quickly."
Delistings Act as a Backstop to Price Declines
Throughout 2025, delistings increased substantially, acting as a sort of "emergency exit" for sellers who would rather not face the reality of a shifting market. Across the last five Januaries, delistings have more than doubled as a share of active listings and quadrupled as a share of new listings.
|
|
Delistings as a share of: |
|
|
|
Active Listings |
New Listings |
|
|
7.0 % |
32.0 % |
|
|
6.6 % |
24.3 % |
|
|
5.7 % |
19.2 % |
|
|
5.3 % |
17.8 % |
|
|
3.1 % |
8.4 % |
"In many cases, delisting reflects not seller distress but privilege, where today's homeowners sit on historically high levels of home equity and a strong majority have low fixed mortgage rates," said Krimmel. "That combination gives sellers flexibility and the luxury to list, delist, repeat until they get their price. As a result, rather than clearing, the market has a tendency to stall out."
|
|
An Uneven Recovery: Changes from January 2022-January 2026 |
|||||
|
Metro |
Active Listings, |
Median |
Median List PPSF, |
Median Days |
New Listings, |
Price Reduced Share, |
|
|
170.2 % |
2.6 % |
5.1 % |
19 |
-4.9 % |
10.7 |
|
|
384.9 % |
-17.1 % |
-11.4 % |
45 |
22.3 % |
9.7 |
|
|
83.9 % |
18.4 % |
11.4 % |
4 |
-9.4 % |
4.4 |
|
|
160.4 % |
9.5 % |
12.2 % |
13 |
13.5 % |
8.9 |
|
|
61.8 % |
5.8 % |
7.7 % |
7 |
-1.9 % |
5.3 |
|
|
50.9 % |
21.0 % |
26.5 % |
-7 |
-14.2 % |
3.3 |
|
|
291.1 % |
3.9 % |
9.3 % |
39 |
15.8 % |
10.0 |
|
|
-1.4 % |
9.4 % |
7.4 % |
1 |
-28.6 % |
3.4 |
|
|
95.2 % |
10.5 % |
17.3 % |
2 |
2.8 % |
5.1 |
|
|
40.9 % |
41.2 % |
34.8 % |
6 |
-14.8 % |
6.0 |
|
|
131.9 % |
16.7 % |
14.6 % |
29 |
0.5 % |
8.5 |
|
|
365.4 % |
0.3 % |
2.8 % |
32 |
4.7 % |
12.0 |
|
|
401.8 % |
-14.1 % |
-6.6 % |
48 |
40.2 % |
16.0 |
|
|
63.3 % |
14.6 % |
10.0 % |
11 |
-12.2 % |
3.7 |
|
|
97.6 % |
22.8 % |
22.6 % |
15.5 |
-12.8 % |
4.7 |
|
|
-8.6 % |
18.1 % |
23.0 % |
-7 |
-38.9 % |
3.2 |
|
|
144.2 % |
-1.7 % |
0.5 % |
5 |
-0.1 % |
6.5 |
|
|
191.0 % |
9.0 % |
21.5 % |
26 |
-2.5 % |
9.5 |
|
|
247.0 % |
0.0 % |
4.8 % |
34 |
14.1 % |
15.4 |
|
|
133.5 % |
4.1 % |
9.5 % |
3 |
10.1 % |
6.4 |
|
|
132.2 % |
0.0 % |
7.8 % |
34 |
-12.5 % |
10.9 |
|
|
125.3 % |
11.4 % |
10.6 % |
22 |
-2.1 % |
7.1 |
|
|
117.2 % |
13.2 % |
15.1 % |
12 |
0.3 % |
6.0 |
|
|
298.9 % |
36.4 % |
17.3 % |
34 |
13.8 % |
12.6 |
|
|
201.1 % |
1.0 % |
-0.3 % |
27 |
12.5 % |
11.2 |
|
|
4.7 % |
40.4 % |
34.0 % |
8 |
-11.4 % |
3.0 |
|
|
50.0 % |
8.7 % |
5.2 % |
6 |
-9.2 % |
5.7 |
|
|
429.4 % |
15.9 % |
11.5 % |
45 |
35.0 % |
7.5 |
|
|
-0.8 % |
19.8 % |
19.2 % |
-3 |
-11.6 % |
1.3 |
|
|
232.9 % |
1.7 % |
6.0 % |
15 |
-26.3 % |
10.5 |
|
|
343.0 % |
4.4 % |
7.8 % |
45 |
14.5 % |
14.9 |
|
|
35.8 % |
16.7 % |
16.1 % |
3 |
-13.5 % |
3.9 |
|
|
307.8 % |
-2.0 % |
3.1 % |
38 |
13.9 % |
18.9 |
|
|
52.2 % |
19.5 % |
17.3 % |
7 |
1.3 % |
1.9 |
|
|
202.6 % |
4.5 % |
1.8 % |
28 |
-4.8 % |
10.6 |
|
Providence- |
46.3 % |
22.2 % |
23.9 % |
15 |
-14.5 % |
4.7 |
|
|
370.5 % |
3.4 % |
5.1 % |
41 |
33.0 % |
11.4 |
|
|
99.1 % |
16.9 % |
20.6 % |
-12 |
-14.3 % |
7.4 |
|
|
178.2 % |
7.3 % |
13.7 % |
30 |
-1.8 % |
10.4 |
|
|
112.0 % |
-3.4 % |
-0.6 % |
25 |
-8.7 % |
7.7 |
|
|
66.8 % |
16.8 % |
14.2 % |
15 |
-10.3 % |
5.6 |
|
|
240.1 % |
-5.8 % |
-5.0 % |
32 |
10.0 % |
15.3 |
|
|
171.9 % |
6.0 % |
11.5 % |
17 |
-9.5 % |
9.3 |
|
|
55.5 % |
-9.5 % |
-13.4 % |
18 |
-13.6 % |
4.7 |
|
|
100.4 % |
-8.0 % |
-5.7 % |
1 |
7.9 % |
4.2 |
|
|
339.5 % |
6.6 % |
7.7 % |
39.5 |
9.0 % |
10.7 |
|
|
414.8 % |
3.8 % |
4.6 % |
45 |
20.7 % |
19.1 |
|
|
186.6 % |
5.5 % |
12.2 % |
23 |
12.7 % |
13.2 |
|
|
58.2 % |
27.4 % |
23.9 % |
17 |
3.9 % |
6.5 |
|
|
97.2 % |
8.9 % |
-0.8 % |
10 |
-9.0 % |
4.8 |
Methodology
Realtor.com housing data as of
Beginning with our
With the release of its
About Realtor.com®
Realtor.com
® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com® is operated by
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SOURCE Realtor.com
