Home sales are getting harder to close because sellers are making a critical mistake

• Homes sit on market 47-62 days in 2025, slowest pace in 10 years.
• 82% of agents report increased price cuts in second quarter 2025.
• 77% of agents say overpricing is sellers’ biggest mistake.

Real estate agents point to one factor as the leading reason why homes are sitting on the market longer, price.

It’s getting harder to close home sales, and real estate agents agree why. According to a recent survey of hundreds of agents by real estate tech venture Homelight, 62% of agents say more deals are falling through compared to a year ago. Homes also are sitting on the market longer. In 2021, during the height of the pandemic-era homebuying frenzy, the typical home sat on the market for just 14 days. That’s increased to between 47 and 62 days, the slowest pace in 10 years.

So what’s the biggest hold up? Prices. 

Most agents surveyed (77%) said the biggest mistake sellers make is overpricing.

“A seller in today’s market has to be savvy enough to know that buyers feel empowered and ready to negotiate,” said Melanie Thomas, a real estate agent with Real Broker LLC in Orlando, Florida, in a report with the survey. “The days when you could assume multiple offers over the asking price are long over. The only homes that will sell with short days on market are the ones that are priced correctly from the start.”

Sellers are trying to adjust their expectations, with 82% of real estate agents across the country saying they saw an increase in price cuts during the second quarter of 2025 compared to the same time in 2024.

The report noted that sellers who use seasoned agents can avoid the mistake of thinking the housing market is the same as it was during the red-hot pandemic-era market, according to the report. The change in market conditions — combined with economic uncertainty, job instability and other economic headwinds — means homes no longer are able to command top dollar.

The Homelight report also provided the top reasons homes fall out of contract:

Buyers getting cold feet — or not entering the market at all — means more people are OK with renting for longer periods of time. That’s not just because of the price tag of a home. It could be because of how much it costs to finance it.

“Many that would never rent are renting until the interest rates drop,” said Kimberly Mitchell, a Gainesville, Florida, agent with Engel & Volkers, in the report. “People are scared to make a move right now. We will definitely see people step back in the market if rates drop.”

Challenging market for homebuyers

There’s no doubt that homebuyers have been feeling the squeeze. Home prices nationally have grown rapidly since the onset of the Covid-19 pandemic. In the second quarter of 2020, the median sale price for U.S. homes was $317,100, according to data compiled by the Federal Reserve. By the second quarter of 2022, that number was $437,700, up 38%. It dropped to $410,800 in the first quarter of 2025, but that’s still up nearly 30% from the early days of the pandemic five years ago.

And it could take years before housing prices return to about 30% of income, a common affordability ratio that means the typical U.S. household purchasing a home would need to spend 30% of their income on their mortgage each month. An analysis from real estate firm Redfin Corp. found that home prices could return to a state of normality by 2030 if mortgage rates drop to about 5.5% and price growth stabilized instead of continuing to rise.

Mortgage rates already have dropped to their lowest levels in nearly a year, bringing down the median monthly mortgage payment to about $2,604, about $200 below May’s all-time high, according to Redfin in a separate report.

Real estate agents surveyed in the Homelight report stressed the best methods to help sell a home — apart from a price just at or below market — include a clean, staged home. Sellers occupying the home, or being present during showings, can drive potential buyers away. 

“My best advice for sellers entering today’s market is to focus on preparation and presentation. Buyers make quick decisions, and first impressions matter more than ever,” said Braden Johnson, a real estate agent with Limitless Real Estate, serving the Phoenix area, in the Homelight report. “Take the time to declutter, stage and handle small repairs — these little details add up to big returns.”

There are other big factors at play in closing home sales, as well. That includes hundreds of home sales a day that are at risk because the buyer cannot get flood insurance — with the National Flood Insurance Program closed as part of the ongoing federal government shutdown.

Homeowners across the country also are increasingly worried about the cost of traditional home insurance. A survey by Realtor.com of recent and prospective homebuyers found that 88% believe they will pay more for homeowners insurance in the near future, and 42% said they already have experienced a rise in homeowners insurance costs.