🏡 Homes Sit on the Market as Affordability Challenges Persist: Insights from the Dave Magua Group 🏡

The start of 2025 has brought a noticeable increase in home listings across the nation, but the big question remains: Are these homes priced to sell? According to recent data, the answer isn’t so clear-cut. While inventory is growing, buyer demand hasn’t kept pace, creating a disconnect between sellers’ expectations and buyers’ realities.

### Inventory Rises, But Sales Lag Behind
New for-sale listings rose 7.9% in the four-week period ending February 2 compared to the same timeframe last year, according to Redfin Corp. (Nasdaq: RDFN). However, pending sales were down 8.1% year over year, signaling that buyers are still hesitant to pull the trigger.

Daryl Fairweather, Redfin’s chief economist, points to a few key factors driving this trend. “Prices are still quite high,” she notes. “The median price of new listings is up 5.7% from last year, and at the same time, pending sales are down. There’s a clear disconnect between what sellers are expecting and what buyers are willing to pay.”

This mismatch is causing homes to sit on the market longer. Realtor.com reports that the typical home in January spent 73 days on the market—five more days than in January 2024. Additionally, the total number of unsold homes (including those under contract) grew by 17.1% compared to the same month last year.

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The affordability crisis continues to plague the housing market. Redfin estimates that the median monthly housing payment is now $2,784, up 8.3% year over year and just $21 shy of the all-time high. Mortgage rates, which began climbing in 2022, have been a major factor in this affordability squeeze.

Fairweather suggests that even a modest drop in mortgage rates could reignite buyer interest. “If rates go from 7% to 6.5%, that could unleash all kinds of buyers onto the market,” she says. “But that’s really up in the air right now.”

### Sellers May Need to Adjust Expectations
With inventory accumulating and homes taking longer to sell, sellers may need to reconsider their pricing strategies. Redfin estimates there’s currently about five months of supply on the market nationaly, up from 4.4 months the year prior. As a result, the typical home is selling for 2% less than the list price—the biggest discount in nearly two years.

Fairweather believes that price reductions or sellers accepting offers below asking price will be key to moving more existing homes. “It’s going to take some adjustment on the part of sellers to see more sales activity,” she adds.

### What Does This Mean for Buyers and Sellers?
For buyers, the current market presents both challenges and opportunities. While affordability remains a significant barrier, the growing inventory and increasing discounts off list prices could create openings for those ready to act.

For sellers, the message is clear: Pricing your home competitively is more important than ever. Homes that are priced to sell are more likely to attract serious buyers, while overpriced listings risk sitting on the market for months.

### Looking Ahead
The housing market in 2025 is shaping up to be a balancing act. While inventory is growing, affordability and economic uncertainty continue to weigh on buyer demand. As the year progresses, all eyes will be on mortgage rates and whether sellers are willing to adjust their expectations to meet buyers where they are.

At the Dave Magua Group, we’re here to help you navigate these shifting market dynamics. Whether you’re buying or selling, our team is committed to providing the insights and expertise you need to make informed decisions.

Stay tuned for more updates on the real estate market, and don’t hesitate to reach out if you have questions or need guidance. Together, we can turn today’s challenges into tomorrow’s opportunities.

*Written by the Dave Magua Group*
*Your Trusted Partner in Real Estate*