REDFIN/FLOURISH/Buyers vs sellers market
By Aliss Higham
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A dwindling number of home buyers coupled with fewer homeowners listing their properties is shifting most of the housing market in favor of buyers—leaving only five remaining "sellers' markets," a new Redfin report shows.
Why It Matters
Fewer active buyers, paired with more options on the market than demand can absorb, typically means longer listing times, more price cuts, and more room for negotiation when it comes to purchasing a home. Mortgage rates have been falling slightly as of late, which could bring some buyers and sellers back to the market, but the balance today favors those on the bid side in most metros.
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What To Know
In July, there were an estimated 1.43 million homebuyers in the market - the lowest level in records dating back to 2013 aside from the onset of the pandemic, when sales briefly froze.
Sellers are pulling back, too: the number of homeowners looking to sell has slipped by roughly 14,000 since May, to 1.95 million in July from a peak of 1.96 million. That marks the first monthly decline in two years and the first since July 2023, when rising mortgage rates helped push the supply of homes for sale toward a historic low.
Only five markets are still categorized as seller's markets:
- Minneapolis, Minnesota (12.5 percent more sellers than buyers)
- Montgomery County, Pennsylvania (36.1 percent)
- Nassau County, New York (40.5 percent)
- Newark, New Jersey (52 percent)
- New Brunswick, New Jersey (22.2 percent)
"Homebuyers are spooked by high home prices, high mortgage rates and economic uncertainty, and now sellers are spooked because buyers are spooked," said Redfin senior economist Asad Khan. "Some sellers are delisting their homes or choosing not to list at all after seeing other houses sit on the market for weeks or months, only to fetch less than the asking price."
Despite the latest dip in sellers, supply still outstrips demand. There are 36 percent more sellers than buyers - the widest gap in records back to 2013 - giving purchasers the upper hand in most places, especially across Texas and Florida.
Redfin notes that a buyer's market only benefits only those who can still afford to purchase a home. With mortgage rates more than twice their pandemic lows and prices at record seasonal highs, many Americans have been locked out. The average U.S. 30-year mortgage rate fell this week to its lowest point in 10 months, though it remains near recent levels. The long-term rate dipped to 6.56 percent from 6.58 percent a week earlier. At this time last year, it stood at 6.35 percent.
What Happens Next
Buyers may still be deterred from the market due to high prices, while some sellers could see their properties sit on the market for longer than hoped for - but not all hope is lost.
"We're likely in the most buyer-friendly housing market since the 2008 financial crisis," Khan said. "Back then, inventory piled up as foreclosures surged, and demand was weak, meaning buyers had negotiating power.
"We're not headed for another 2008, though; many of today's homeowners have built substantial equity thanks to the recent surge in home values, and today's borrowers must meet stricter lending standards. Plus, there are more options for avoiding foreclosure if a homeowner is at risk of defaulting, such as loan modification."
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