Millions of American homeowners did what seemed perfectly reasonable at the time: they stayed put for more than five years. Selling meant giving up all of that in order to reenter a market that was charging more than 6 percent. They had locked in mortgage rates around 3 percent, which now seem almost unreal. So they bided their time. and held out. Not because no one wanted to move, but rather because the math of moving was absurd, the housing market collapsed. Slowly and unevenly, that standoff seems to be ending.
Housing analysts have been closely monitoring a recent shift in the data. Newly constructed homes are now selling for less than existing ones for just the sixth time in 26 years. This is an odd inversion that doesn’t typically occur. Fresh finishes, contemporary designs, energy efficiency, and kitchen tiles that aren’t ten years old are all premium features of new construction. However, as of June of last year, the median existing home sold for $435,300, while the median new home sold for $401,800. It is probably a sign of a turning point, according to Nick Gerli, the founder of the real estate analytics company Reventure App. He might be correct. Another possibility is that this is a transient distortion brought on by builders flooding entry-level price points. In any case, it’s something to be aware of.
| Key Market Data | Details |
|---|---|
| Median New Home Price (June 2025) | $401,800 — down 4.9% month-over-month |
| Median Existing Home Price (June 2025) | $435,300 — up 2% year-over-year (NAR) |
| Existing Home Sales vs. Pre-Pandemic | Down over 25% from pre-pandemic norms |
| Delistings Surge (May 2025) | 47% increase in homes pulled from market vs. prior year |
| Lock-In Mortgage Rate (2020–21 buyers) | ~3% fixed — vs. current rates near 6.43% |
| Homes Under Construction | Highest since 1973 as builders race to fill supply gap |
| Falls Out of Contract (National Rate) | Roughly 1 in 3 homes going under contract fail to close |
| Market Analyst | Nick Gerli, Founder & CEO, Reventure App — tracking the new-vs-existing price inversion |
For the better part of five years, millions of American homeowners did something
You begin to notice things when you stroll through any suburban neighborhood that has been for sale for some time. The lockbox is dusty, the staging photos are a little out of date, and listings that were new in March are still up in May. Sellers set their prices with the expectation that the bidding wars and waived inspections of 2021 or 2022 would recur. It hasn’t. Customers are worn out. To be more precise, they are resistant. In addition to buyers developing a patience—or perhaps a stubbornness—that sellers did not expect, persistently high interest rates have calcified affordability in a way that price alone cannot correct.
Many sellers have responded in a subtly defiant manner. They have completely removed their homes from the market rather than modifying their price expectations. According to Realtor.com, the number of homes being delisted nationwide increased by 47% in May of last year when compared to the same time last year. The site’s chief economist, Danielle Hale, pointed out that since many sellers are anchored to peak price expectations and supported by strong equity, it seems more sensible to walk away from a deal rather than accept less. Observing all of this gives the impression that both parties are waiting for the other to blink first. More and more, it appears that the sellers may come in second.
Most people are unaware of the depth of the lock-in issue. A person who purchased in 2020 or 2021 at a 3 percent interest rate and now needs to sell must deal with the harsh math of giving up a rate that costs them about $1,200 a month on a $400,000 loan balance in favor of one that costs $1,900 or more for an equivalent amount. That’s a significant change in lifestyle. That’s a different kind of financial life. As a result, it should come as no surprise that many of those owners have decided to stay despite changes in their family’s needs, job relocations, and the importance of school districts. According to one market observer, the only thing driving people at the moment is necessity.
When an opportunity arises, builders have been building. In the United States, there are currently more homes being built than there have been since 1973. It’s not a minor detail. It is a calculated strategic wager that there is or will be demand and that new inventory can fill the supply gap left by reluctant current home sellers. Builders appear to have built ahead of the current buyer market based on the price concessions they are currently offering. That carries a risk. However, it has also produced a unique situation where the buyer of new gets a better deal than the buyer of used, at least on paper.
This isn’t clean at all. Approximately one in three properties under contract nationwide do not close, a statistic that illustrates the precarious state of buyer confidence. Inspection results, financing issues, and appraisal gaps cause deals to fall through. When they see the total monthly cost on paper, buyers who appeared prepared become hesitant. Given that rates continue to be the primary affordability lever, it is still unclear whether inventory returning to pre-pandemic levels would be sufficient to significantly affect prices. In 2022, Zillow estimated that it would take thirty months to return to normal. The time on the calendar has advanced. It’s another matter entirely whether the market has followed.
Observing all of this, it seems as though the housing market is gradually decompressing after years of unsupportable pressure rather than crashing. The sellers who persisted are beginning to run out of patience. Customers who waited are beginning to have more options. That isn’t a solution. A renegotiation has begun. And those often take longer than anyone anticipates in real estate.
