Why Are Home Prices Rising When No One Is Buying?
If you’ve been watching the real estate market lately, you might be scratching your head. Demand is down, buyers are sitting on the sidelines, and economic uncertainty is looming. By all traditional logic, home prices should be dropping—but they aren't. In fact, they just posted their biggest gain in seven months.
According to a recent market report, the median U.S. home-sale price climbed 2.3% during the four weeks ending November 16. This marks the most significant increase we've seen in over half a year.
So, what is going on? Here is a breakdown of the strange paradox currently gripping the housing market.
The "Supply" Problem
The primary culprit for rising prices isn't a frenzy of buyers; it’s a lack of options. The "law of supply and demand" is still in effect, but it’s the supply side that is tipping the scale.
Total inventory is dwindling. While active listings are technically up year-over-year, that growth is losing steam rapidly—posting the smallest increase since February. With fewer homes coming onto the market, the pool of available properties is shrinking. This scarcity is propping up prices, even though there are fewer people lining up to buy.
Where Have All the Buyers Gone?
Demand is undeniably slow. Pending home sales recently fell by 0.8%, the biggest decline in four months. Several factors are keeping would-be homeowners on the sidelines:
Economic Jitters: Uncertainty about the economy is making people hesitant to make big financial commitments.
Sticky Costs: While home prices are growing slower than wages (which technically improves affordability), the combination of high prices and mortgage rates—which have ticked up recently—keeps monthly payments out of reach for many.
Stale Listings: Homes are taking longer to sell. The typical home now sits on the market for 49 days, the longest span for this time of year since 2019.
It’s Not Happening Everywhere
Real estate is famously local, and this trend is no exception. While the national median price is up, the experience varies wildly depending on where you live.
The Winners: The biggest price gains are concentrated in the Rust Belt and Midwest. Affordable metros like Cincinnati, Pittsburgh, and Detroit are seeing significant price jumps (up to 10.5% in Cincy!).
The Losers: Conversely, prices are actually falling in some of the most populous areas. 18 of the top 50 metros saw price declines, with cities like Fort Worth, Dallas, and Jacksonville leading the drop.
What This Means for You
If you are a buyer: Don't let the headline scare you. The market is slow, and homes are sitting longer, which means you may have more leverage than you think. Sellers who need to move (due to divorce, relocation, etc.) may be willing to negotiate, especially if their listing has been stale for over a month.
If you are a seller: Pricing is everything. The inventory shortage might protect your home’s value, but the lack of demand means you can't get greedy. Move-in ready homes are still selling quickly, but overpriced listings are languishing.
Disclaimer: Real estate data is subject to change. Always consult with a local real estate professional for advice specific to your market.
