Goodbye, bidding wars. Home sellers are losing some of the power they've enjoyed for the past 2 years.

• Americans are having a harder time selling their homes.
• A surge in mortgage rates have cause buyers to sit on the sidelines.

Americans are losing their appetite for home buying.

Sales of previously owned homes fell for the eighth straight month in September to a seasonally adjusted annual rate of 4.71 million units, the National Association of Realtors said Thursday. That's down 1.5% from August's pace and 23.2% from the year-ago rate. It also marks the slowest rate of sales since September 2012.

Economists surveyed by Bloomberg forecasted a similar decline for the month. September's readings stand as another reminder of just how much power home sellers have lost in 2022.

It all comes down to the fact that prospective buyers have had their fill of surging housing costs.

"Home sales are plunging because people can't find affordable places to buy," Holden Lewis, home and mortgage expert at NerdWallet, told Insider. "The culprit is skyrocketing mortgage rates. Home prices were higher than a year earlier, but the pace of price increases has slowed dramatically."

Indeed, home price growth is moderating. In September, the national median list price climbed 8.4% from last year, coming in at $384,800. However, despite the annual gain, September represented the third consecutive month of price declines.

That does not mean homeownership has become any more affordable for prospective buyers. Whatever affordability buyers have gained through sliding prices, they are losing in mortgage rate hikes.

"Inflation and high mortgage rates are taking a bite out of homebuyer budgets," Daryl Fairweather, the chief economist at real estate brokerage Redfin, said in a statement. "Few people are able to afford homes costing 50% more than just two years ago in some areas."

This has created a bad recipe for US home sellers.

As Americans face mortgage rates that are nearly twice as expensive as they were in 2021, more people are putting their homeownership dreams on pause. With fewer buyers to purchase homes, existing inventory is piling up on the market. The additional supply and fading demand have made home buying less competitive. And that means sellers are not only losing leverage — they are also losing money.

Indeed, data from Redfin shows that in August not only did the bidding-war rate drop to its lowest level since April 2020 but that during the month, the average home sold for less than its list price for the first time in over 17 months.

"Resourceful sellers understand that the market is intertwined with rising mortgage rates," Sam Chute, a Redfin listing agent said in a housing report on the decline of bidding wars. "Buyers aren't going to pay extreme amounts of money or waive contingencies like they did last year."