You may have seen headlines saying a near record number of homeowners are taking their houses off the market. If that has you wondering, "Wait... is something bad about to happen?" you're definitely not the only one.
When more people start stepping to the sidelines, it can feel like a warning sign. You might even wonder if they know something you don't.
Here's the thing. Some people make it sound like this means the housing market is about to crash. But when you look at the data, it tells a much more practical story.
What the Numbers Actually Say
According to the latest data from Redfin, 5.5% of all homes for sale were taken off the market in May. That's true, and it's one of the highest levels we've seen since March 2020, as the graph below shows.
At first, that might sound a little alarming. But a lot of the concern comes from the way the story gets told. Headlines like "A near record number of sellers are pulling their listings" are designed to grab attention, and they spread quickly, especially online. The reality is, homeowners take their homes off the market for plenty of reasons that have nothing to do with a housing market crash.
According to Redfin, there are four main reasons this is happening:
Homes are taking longer to sell, so some homeowners decide to wait instead of leaving their property on the market.
There are more homes for sale than there are active buyers, giving buyers more choices. If a home isn't priced well or doesn't show its best, it can easily get overlooked.
Some sellers are still hoping for the prices they could have gotten during the pandemic, but today's buyers simply aren't willing to pay that much.
Economic uncertainty is making everyone a little more cautious. Buyers are waiting to make a move, sellers are rethinking their plans, and that naturally slows the market down.
Did you notice what's not on that list? There's no mention of a housing market crash or home prices suddenly falling.
This is really about a slower market, more competition, and sellers deciding what makes the most sense for them.
One Detail Most Headlines Leave Out
Need a little more reassurance that this isn't a market crash? This next statistic helps put things into perspective. Yes, more sellers are taking their homes off the market. But Redfin also found something you probably won't see mentioned in social media posts.
More homes are being put back on the market.
While more homeowners are taking their listings off the market, more are also putting them back up and giving selling another try. In fact, relistings are now at one of their highest levels since the pandemic.
In May, 5.5% of listings were taken off the market, but 2.3% of homes were also relisted and put back up for sale, as the graph below shows.
Some homeowners are simply taking a short break before giving it another try. That shows this often isn't a permanent decision. In many cases, they're just hitting pause and coming back with a new strategy.
Many times, a small change in strategy is all it takes to get a home sold.
And if you still need a little more reassurance, here's something else to keep in mind. Buyer activity may be starting to pick up again, which could encourage more sellers to stay on the market or even bring others back.
The National Association of Realtors reports that existing home sales rose 3.2% in May. That's the biggest monthly increase since December. As The Wall Street Journal put it:
““Home sales in May posted the biggest rise this year, a sign that the housing market’s crucial spring selling season may be showing signs of life after a sluggish start.”
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That doesn't sound like a market that's in trouble.
Bottom Line
If you're seeing headlines about a record number of sellers taking their homes off the market, there's no need to panic. It's not a sign that the housing market is about to crash. It's simply a market that's adjusting.
