They say most home sellers are also home buyers.
In other words, they aren’t just selling their property and disappearing into thin air.
Nor are they typically renting either. Often, they are selling one home and purchasing a replacement.
As such, there’s no inventory gain. There is no benefit to the housing market other than churn, which benefits those who get paid for the transaction.
Such as real estate agents, mortgage loan originators, title and escrow companies and so on.
Sellers Don’t Want to Be Buyers Right Now
Here’s the problem.
Given the lack of affordability and dearth of supply at the moment, sellers today don’t want to be buyers (and who can blame them).
Nobody wants to be a buyer right now. It’s tough out there. This is no secret.
As such, existing homeowners, who very likely hold cheap debt, a low loan balance, a low tax basis, and all the other benefits of having bought years ago, are very much “would-be sellers.”
I’ve spoken about this before. Sure, they will sell, but only at the right price.
And chances are that price doesn’t work for many buyers today because affordability is so poor.
To add insult to injury, the existing homeowner’s price must factor in the very real cost of the seller giving up their ultra-low mortgage rate and taking on a much higher rate on an even higher purchase price.
That tricky dynamic puts even more strain on already limited for-sale supply.
We underbuilt for many years post-early 2000s housing crisis, and this simply makes it worse.
It’s why home prices continue to stay stubbornly high despite affordability telling you they should fall.
Today’s Home Sellers Demand Top Dollar to Offset Replacement Property Math
If you’re a home buyer today, you need to look at things from the home seller’s perspective.
Many current homeowners are sitting on 3% 30-year fixed mortgages. Or even sub-3% mortgage rates.
Their monthly payment feels like a steal (and is) compared to what a new buyer would face at today’s rates.
If they sell today and buy again (which as I said most plan to do), they’re not only losing that low-rate mortgage, but also taking on a new loan at rates that are double (or more) than what they currently pay.
In addition, they’re paying a much higher price for their replacement home in a still-competitive market.
The math simply doesn’t pencil for a lot of sellers unless they get top dollar on their current property.
So they list for some exorbitant price and everyone tells them they’re listing way too high.
But they don’t really care. They are happy to stay put if they don’t get their price. They are “would-be sellers” with time on their side.
This allows them to list at an aspirational price and simply bide their time.
Even in normal times, homeowners are emotionally attached to their homes. And due to mortgage rate lock-in, they’re financially anchored as well.
This Is Why Supply Stays Tight and Home Prices Stay Elevated
The end result is pretty straightforward here.
A vicious cycle of limited for-sale inventory, high home prices, and a reluctance for more existing homeowners to sell.
If fewer homes hit the market because owners don’t want to trade in their 3% mortgage and its tiny low balance for a new, much more expensive one, inventory stays tight.
Meanwhile, the few properties that do come to market are priced to compensate the seller for giving up that low rate, low balance, low tax basis, etc.
They need motivation somehow and listing for a fire-sale price ain’t it.
As such, prospective buyers who are already stretched by high interest rates and prices either can’t afford it or choose to wait it out.
Sure, new construction helps to some degree, but it can’t fully offset this strange dynamic, nor are most new builds in areas where folks want to buy (think the outskirts).
Builders face their own challenges today with high costs and tight margins, and they haven’t forgotten the early 2000s housing bust.
So they’re rather smartly not flooding the market with for-sale inventory either.
The end result is sustained high home prices on a national level, even if some markets experience weakness, namely those with a higher concentration of more recent home buyers (those with less to lose by selling or foreclosing).
The irony is that the “right price” for sellers, which is most often a “high price,” keeps the housing market from cracking in a meaningful way.
- Most Home Sellers Are Also Home Buyers: Why That’s a Problem Today - May 13, 2026
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- Mortgage Rates Doing What They Do Best in May: Rise - May 11, 2026