More Homes Are Selling Below Asking Price as Inventory in the U.S. Climbs to a 5-Year High In Florida, homes are selling about 5% below the asking price, according to Redfin data.

^{This article originally appeared on Business Insider.}

A five-year high in the inventory of homes for sale and anemic buyer demand is forcing many properties to sell below their asking price.

According to Redfin, the supply of homes for sale in the U.S. reached the highest point since 2020 last month, with active listings climbing 12.9% year over year to climb past 1.79 million.

Behind the jump are more sellers and less demand from buyers.

Owners appear to be getting tired of waiting to sell, even if selling requires giving up low mortgage rates. As of the third quarter, 17% of owners had a mortgage with a rate of over 6%, the highest share since 2016. It suggests that more homeowners are accepting higher borrowing costs after years of waiting for mortgage rates to cool.

But prospective buyers aren't being lured back to the market yet. The typical home sold last month sat on the market for 56 days, the longest period of any January in five years, Redfin cited.

Demand has teetered, and pending home sales in January hit the lowest level since the firm began recording the data in 2012. Around 41,000 agreed purchases were canceled, marking the highest rate of failed deals in eight years.

Buyers are often getting cold feet amid high mortgage rates and high prices. The 30-year fixed mortgage rate topped 7.04% last month, while the median home sale rose 4.1% from a year earlier, reaching a price of $418,581.

Affordability concerns are top of mind for consumers surveyed monthly by Fannie Mae.

"Consumers seem increasingly pessimistic that housing affordability conditions will improve across the board, as a growing share expects home prices, rent prices, and mortgage rates will all go up," Kim Betancourt, vice president of multifamily economics and strategic research, said in a report.

Redfin said that macro uncertainty is another headwind for buyers, with questions about tariffs, layoffs, and return-to-office mandates looming large.

With few buyers in the market, price drops have become more common, and the typical U.S. home is now selling 1.8% below its asking price — the largest cut in nearly two years, Redfin said. This varies regionally. In Florida, homes are selling around 5% below the asking price.