Why 42% of Sellers Are Rage-Quitting the Housing Market

rates jumping from 3% all the way up to 7% has created a lock-in effect where homeowners are simply just staying in their homes regardless of trying to sell it, not getting the price that they want, and then basically rage quitting their listings, taking them off of the market, keeping them stuck, and it's preventing the market from moving forward. And we're just one labor crisis away from this all falling apart and the economy really slowing down further. Let's dig into the data and what it looks like. So, look, sellers are sitting on low interest rates.

A lot of them, over 80% are below 6% mortgage rates, and this is creating a lock-in effect at this time. Here's a chart from Reventure. It's the record low home buyer demand to start 2025. This is existing home sales, and as you can see, the number of existing home sales has dropped from 2021 down about 40% uh to $4 million on a per annual rate.

And the problem is when we have this lock-in effect where these homeowners have low interest rates and they have to move to another house that is thousands of dollars more to make that move, they stop upgrading. They start down they stop downgrading their homes and they stop relocating close to family. The death, divorce, disease, the 3Ds as well are the things that really will trigger the moving. But these want to moves, not have to moves are just causing the market to sit still in a lot of cases.

And the problem is with this is if a seller has a great rate and they don't want to give that up because they have an affordability problem themselves, then they end up just staying in that house. And 70% of sellers who do sell then go to buy. So that's pulling a ton of buyers who really do want to move out of the market. And this is a huge problem for demand driving forward.

And that is why we're seeing these existing home sales really struggle going into uh this year and especially into the end of the year as we start experiencing seasonality. This is especially true in Florida, which is where I'm located because the relocations have dropped about 80% from the peak years as well and people are actually relocating back to where they came from. So here's information that basically shows your monthly mortgage payment. This is a great chart because you can see here in 2021 that is when in 2022 the Fed started raising interest rates on the Fed funds rate.

They increased it, you know, nearly 4% in a short period of time and that spiked the cost of buying with a mortgage. So you can see the existing homeowners are paying like $1,500 a month, which is fantastic. And if you were to buy that same exact house, you would now be paying $2,500 a month. So, an extra $1,000 a month, uh, which is a significant increase in their monthly payment.

And that is a huge problem, creating this stubborn lock-in effect. And I totally understand this. If you're a seller and you own your home, why would you sell it if you have a two or 3% rate? Sellers can't afford to be stubborn if they don't have to move and it's just a like to have so they can list it on the market and see and test it and see if they can get what they want.

Obviously, this is very frustrating to realtors who spend thousands of dollars trying to market the property and then have the seller just remove it right away after they don't get the price that they want. And generally, the price that sellers want are unrealistic because their house isn't upgraded or it's next to a new construction community and they don't have the upgrades or the incentives to be able to compete with somebody else who can buy down their interest rate to the 3 to 4% like many of the builders are doing to get their inventory to continue moving. So, this is a really great chart. This comes from Compass.

This is data for listings in 37 states where Compass operates. This says a percentage of withdrawn listings as a percentage of new listings uh on a monthly basis. So, you can see as a percentage of new listings, 42.3% of listings are actually being pulled off of the market. Obviously, this generally happens during the holidays.

You can see over here that whenever the holidays hit, people do pull their listing off the market and then list it in the new year uh because they're unable to sell. They don't want to be showing the house while they have people over. But we're seeing a spike already early in the year in August and September. And this is basically what I'm referring to, which is the rage quitting with the withdrawals and the cancellations and the expireds.

We're seeing record number of expireds happening right now. And that is actually the reason why we're not seeing higher inventory than we would this time of year. We've actually seen inventory drop about 10%. Simply because sellers are getting frustrated.

They can't get the price that they want. They're starting to do the math realizing, hey, if I buy this new house over here, I'm going to have to basically increase my payment by 80, 100% to purchase the new home or it's the same amount of money and I'm downsizing. Uh so it's not exactly a great trade for sellers right now just uh to trade and and find another house to buy. And who's driving the market right now?

This is a fantastic chart from um Fortune age distribution of home buyers and sellers by generation. So you can see the sellers in the dark red, the buyers in the light red and you can see that the younger boomers represent the majority of the sellers and they also represent the majority of the the buyers from this segment and the Gen Xers right behind them are competing for homes. But I mean, the older millennials, the younger millennials, and the Gen Z, I mean, they are loaded up with student debt, credit card debt, um, you know, car loans, all this stuff that's preventing them really from an affordability standpoint from being able to get into this market. So, not only are sellers who are older generally are locked in, but Gen Z is locked out.

And, um, the young boomers right now are driving the market. And this next chart will will show you that. And you can see the repeat. This is the median home buyer age.

The repeat buyers are 61. Look at that up from 36 in the 1980s. All buyers, the the median age of a home buyer right now is 56 years old. It used to be 31.

And the first time home buyers jumped from 29 years old to 38 years old. This is a massive, massive change. And you're talking about an entire decade of first-time home buyers that are basically locked out of the marketplace because they can't afford these prices at these rates. My preference is actually for prices to come down, not for rates to come down.

Uh, however, the Fed is going to do whatever it can do to keep the market going along with FHFA director uh PY. He's obviously a home builder. He's going to do whatever he can to keep the market moving. That includes lowering rates and finding incentives for buyers to buy this.

In my opinion, overpriced junk that they slap up and they try to sell for an insane price to the next generation. And I think, you know, the best thing that can happen is prices coming down. This is why the younger generations are priced out. There's obviously a housing bubble.

This is home price to median household income ratio. We are past our previous 2008 housing bubble in terms of this ratio. And um ultimately when this happens, the market freezes, right? So older people are locked in with low rates and young people are locked out with high rates.

It's a massive issue. Now here's the data just to kind of look at this in a historical standpoint. The national data basically shows there is a slowdown. Days on market has increased 50 days to 60 days in in August.

Uh slowing that by showing that uh buyers are slowing. So this is not just a regional issue where we know the south and you know obviously Texas and Florida are leading the pack. Um, Arizona is starting to have some issues. California, Colorado, definitely there's certain areas that overbuilt, had way too much speculation uh over the last few years.

And then 2020 hit and the, you know, uh, the rates started going up and it just kind of crushed the market. And this is starting to show up all across the country now. And we do think that the Northeast will start to see a little bit of a slowdown. Just because they didn't have as much speculation or new construction building, I don't think will will cause them to not have any impact.

Obviously will impact them a little bit, but you can see the days on market is going up, the price reductions are going up, the month supply is going up, and it's it's across the board an issue. Now, a lot of people say, "Well, there's not going to be a crash because homeowners have a ton of equity." That's what they said last time, too, right? And so it's not that home homeowners don't have a lot of equity. It's that they start to lose their jobs.

The prices fall, you know, over a couple years and there's starting to be foreclosures that we have a backlog of basically five years of foreclosures that really weren't processed that should start to get processed if the government doesn't step in of Q2 of next year because of all their loan loss mitigation programs. Um but median price just started turning negative across the board across the United States. And when we look at this compared to 2008, you know, we had a 10 plus month supply of inventory because the banks had to offload all their inventory with the um with their tanches getting downgraded from the rating agencies. And today, we don't know what's going to crack the market.

My guess is as good as yours, but I do think that the labor market's going to crack and that could cause some issues or the bond market's going to crack and spike because of our deficit issues as the US government. But right now, our month supply is 4.6. So there's no reason for a lot of people to sell if they're locked into their low rate. There's a lot of people who want to sell, but we also have the silver tsunami coming through where we're sadly going to lose about 15.6 Americans.

Uh usually the boomers are older over the next 10 to 15 years here according to a Harvard study and th those houses will come available that they own and a lot of them will will be sold through the estate and that'll add to the inventory and meanwhile the the younger folks are priced out. Another concerning point that we're seeing is that roughly one in seven US homes that are purchased are getting cancelled along the way. You can see 2025 is much higher than the prior years. And in Jacksonville, Florida, we're actually seeing a a cancellation rate of 25 to 30% depending on the month this year.

So it's almost double what we're seeing here across the board. And that's because 30% of the purchases in uh Jacksonville have been from investors, right? And so American Homes rent progress homes, Invitation Homes, these large single family rental aggregators, they come in and buy and sell. They're actually starting to to dispose of a lot of their inventory.

Not all of it, but you know, they're starting to to sell off the parts that they don't like and add that inventory back into the market. And right now, they are net sellers in our specific market. But it's something to watch, right? Because cancellations mean that these price these properties come back onto the market.

It's very frustrating for the sellers and uh they're unable to get the price that they want. We're starting to also see this is the foreclosure filings in the US. This is data from January 2018 through August 2025. The filings are starting to move up.

So in September 30th, the the FHA loan workouts, which I think are the next subprime mortgage crisis, these FHA loans that are at the 580 credit score and have a bunch of workouts where people have just been, you know, lumping their payments onto the back end of their loan versus going to foreclosure for years. They've been doing this for years at the taxpayers's expense, which is kind of crazy. They made it a lot more difficult to be able to do that process as of September 30th. So, I think that will add some to the inventory as it gets processed through or it'll be sold off to some sort of hedge fund off market and will be turned into a rental of some sort.

But the foreclosures, I think, will start to tick up uh moving forward as we do see prices fall here in Florida and across the country and um the consumer continue to get under stress. Another indicator that we're seeing is that August uh luxury home sales have dropped to their lowest level in more than 10 years. You can see the number of luxury homes uh this is according to Redfin is just kind of falling off of a cliff. So, you know, the high-end buyers are starting to to pull out and be a little bit more careful of what they're seeing there.

Now, what's happening on the ground in the south specifically? This is where the majority of the pain is. You can see the southern states, Texas, Florida, Oklahoma, you know, across the board. You can read those.

But the new homes for sale are stacking up to a level that is higher than the 2008 crisis despite all of their incentives that they're offering, right? They're buying down your interest rates, they're giving you free refrigerators, etc. But it's getting worse every single month. And a lot of the builders are just simply stopping projects uh or trying to.

A lot of the times they do have to finish their project once they've broken ground and they've started the financing and got the crews out there. But a lot of the new projects that were meant for like, you know, phase three, phase four are stopping and they're just going to wait and see and try to build a house one at a time versus all at the same time. And so they're being really careful on how they do it. Now, as we mentioned, it's very regional, so you want to look micro before you kind of talk about the macro.

And this is a good rule of thumb because every market is so different. Even throughout Florida, there's some areas of Florida that are doing just fine. There's other areas that are just getting completely crushed. Again, it depends on how much speculation there was for that area from an investor standpoint, from an Airbnb standpoint and from a rental standpoint.

All you know, it it's it's a huge problem and why people would migrate to that area. So, and then secondly, the new construction around that area. You know, is there more land to build a similar type of product to compete with yours? But you can see that four of the seven major cities in the United States according to realtor.com are in Florida.

And so there's Miami, Orlando, Jacksonville, where I am in Tampa. We're also in Tampa as well. These areas are really, if you're a buyer, this is fantastic news because you're getting some relief. And if you're a seller, you need to be real about what the prices that you can get for your home and probably move quickly because I don't think that this is just a short downturn.

I think we're definitely in a correction already, which is a 10% decline from the peak. It'll probably be, you know, another couple years until this completely plays out. We'll have to see what happens with the debts of the consumer and the debts of the United States and to see what the migration patterns are to Florida because we have a negative birth to death rate ratio here. So, it can get really ugly pretty quickly if we don't get the migration that we need to our state uh to fill up all these houses that we're building.

Then we see Texas, right? Austin, Texas is is awful. The guys I hear there, rent prices are going down. Uh, home prices are going down.

It's not getting any better. It's actually getting worse every single month. I talked to uh the number one home flipper in that area. And um he's he's saying it's getting worse every single month, even on the rental renewal.

Same thing here in Jacksonville. Rents are down about 10 to 15% from the prior year. So, you know, it is across the board different in each area. So, I would keep that in mind.

Uh and it won't impact your area differently. So divided Fed, this is this is what's causing the Fed to kind of figure out, hey, what do we do next? This data just came out. The Fed officials saw another two interest rate cuts by the end of 2025.

That's what the minutes show. And they're they're concerned about the labor market. This is the one of the reasons why we've seen interest rates fall recently is because the labor market obviously had that massive write down of over 900,000 jobs uh according to the BLS. Now the government shut down and they're not even releasing the data.

But the stock market is celebrating because they're saying, you know, if the labor market weakens, we might get more rate cuts here for longer. And that's fantastic for stocks. They can use those low rates to borrow lower and grow their businesses. And um it's kind of like bad news is good news in this type of market, which is pretty interesting.

And it's only going to get worse. So this is Fed Pal. You know, printer is coming. He's here to continue to drive the economy as far as he possibly can.

He's been trying to resist, you know, Trump's effort to get them to reduce the the the Fed funds rate even lower than it is right now. I think obviously if we did not have the government's intervention, the Fed's intervention with interest rates, you know, having $2.3 trillion of mortgage back securities on their balance sheet, then, you know, rates could easily be in the 10 to 12% range, which would drive prices, you know, down another 30 40% from here. And that would be fantastic for the next generation and not so good for the generation that already owns real estate. And so you kind of have to decide as the government, who am I going to help out here, the older generations that have have their homes, they're going to lose all their equity going into retirement or am I going to make way for the younger generations by, you know, having rates go higher?

And obviously the government has chosen let's lower rates and continue to inflate assets and the next generation is just going to have to figure it out. And that's why gold is telling us what it's telling us, right? They're we're trying to print our way out and try to grow our way out of our debt and our deficit. And the the investors don't aren't buying it, right?

That's why they're going into crypto. They're trying to go into gold. They're trying to find anything that's not USD um fiat currency so that way they can avoid the depreciation of our dollar, which has already dropped 10% this year. And gold is telling us this.

Uh and I don't think you know real estate used to be a great asset class to stay during this type of you know period where you could expect a little bit more like higher inflation and low growth but the problem is that this completely overbuilt in some areas and the migration isn't there and also people are stop having household formation because it's too expensive to have kids so you know there's there's a lot of issues with real estate being a hedge against this type of period. We're also seeing on the rental side a lot of distress late payments continue to tick up. This was an incredible chart. Goes up about 2% in um in terms of late payments from the prior month uh the prior quarter.

And that is really important. I mean, you're talking millions of people who are late on their payments already. And we haven't even seen a crack. This is partly because we've starting to see, you know, higher unemployment.

We're seeing job openings decline. You can see that blue line there. That's the job openings decline. Unemployment is starting to, you know, pick up a little bit.

This is what the Fed is talking about. They're concerned about. It's a part, you know, partly just the e economic cycle. We obviously had the higher rates, but also the concerns about how AI is going to be playing into um companies hiring, right?

There's stories about, you know, even companies that do a lot of coding, like 30% of their coding is already being done by by AI, and so they don't need to hire as many people. This is a great chart that just came out. This is year-end repossession estimates, 2008, 2025. This is starting to show that the consumer is stressed, right?

There. They bought these really expensive cars and they depreciated and uh they can't make the payments anymore. And this is just as bad. If you look back, this is just as bad as it was in 2009.

Like almost as bad, 2008. And we again, we haven't even started to feel like we're at record highs in the stock market, Bitcoin, you name it. Gold. And the consumer just does not feel the same way that Wall Street feels.

Wall Street and the consumer are completely on different paths. And consumer sentiment across the board is the lowest uh since the great financial crisis. So people do not feel good about the future or their jobs. And the consumer has loaded up with debt.

I mean, look at this. The consumer has never been this much loaded up with debt with credit card debt, student loans, car debt, house debt, all of it combined. They feel like they can't. There's no way out.

Here's the credit card delinquency balances. You can see they're starting to spike up. We might get past the 2010 level in terms of the um and this this just gets me crazy because I see the Clara stuff, the buy now pay later on everything. I'm like, who's gonna be paying like 20% on their burrito they bought from Chipotle?

It's out of control. And uh this is unpaid credit card balances for the late last uh at least three months, rose the highest level in 14 years, which is obviously another red flag. So, look, the consumer is stressed, sellers are locked in, buyers are locked out. I'm just curious how what do you think will happen in your specific real estate market?

Love to see you comment below. Do you think we're headed lower in prices? Do you think we're headed higher? My prediction is for Florida specifically, we're going to see a 31 to 42% decrease in prices from the peak in October 2022.

Love to hear what your thoughts are and how much do prices need to come down if you're a buyer for you to actually consider buying a home. Let us know. Like, comment, and subscribe. As always, you can follow my Substack as well.

I'll put the link below. I talk about things there I can't talk about on YouTube. Appreciate you watching. I'll be in uh in touch next week with more data.