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By Thomas Westerholm
Life & Trends Reporter
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The United States housing market is showing signs of a dramatic power shift and it's not good news for sellers.
A new report from Redfin found that sellers now outnumber buyers by a staggering 34%. The estimated 1.94 million active home listings versus 1.45 million buyers represents the largest gap in more than a decade of records, according to the real estate site.
Mortgage Rates and High Prices
One of the biggest factors keeping buyers out of the market at the moment are high mortgage rates. The average 30-year-fixed mortgage rate hit 6.73% in April, pushing monthly housing payments to all-time highs.
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The median price of a home, meanwhile, rose just 1.6% after jumping 6.2% last spring. Redfin analysts expect this trend to continue.
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Newsweek reached out to real estate experts requesting comment on Wednesday, June 4.
The Biggest Buyers Markets
The housing market downturn is hitting Sun Belt metros the hardest—especially in Florida and Texas, where oversupply (due to a pandemic-era construction boom) and skyrocketing insurance premiums due to climate change are dragging prices down.
In Miami, there are nearly three times as many sellers as buyers, the most unbalanced market among the nation's top 50 metros.
Neighboring Florida cities like West Palm Beach, Fort Lauderdale, Tampa and Jacksonville also rank among the most severe buyer's markets, with sellers outpacing buyers by more than 100% in each.
Texas cities are showing similar cracks. In Austin, sellers outnumber buyers by 124%, and home prices are already falling—down 3% year over year. Houston, Dallas, San Antonio and Fort Worth are all deep into buyer's market territory as well.
Redfin reports that 31 of the 50 largest U.S. metro areas are now buyer's markets, while just seven are seller's markets. The rest are considered balanced.
A Struggling Condo Market
The condo segment is under especially intense pressure.
There are 83% more condo sellers than buyers nationwide, largely due to surging homeowner association fees and rising insurance costs.
Median condo prices have barely moved, increasing just 0.4% year over year, far below single-family homes.
A Handful of Sellers Markets
While much of the country is tilting toward buyers, a handful of markets—mostly in the Northeast and Midwest—continue to favor sellers.
Newark, New Jersey stands out as the nation's strongest seller's market, with 47% fewer sellers than buyers. The median sale price in Newark is up 12.2% year over year, the highest increase among the top 50 metro areas.
Other seller-friendly markets include Nassau County, NY, Montgomery County, PA and Cleveland, OH, all of which have more demand than supply. Many of these metros are less overbuilt and benefit from strong local job markets, as well as lower exposure to climate-related risks.
What People Are Saying
Speaking to Newsweek, National Association of REALTORS Chief Economist and Senior Vice President of Research Lawrence Yun explained, "When it comes to the housing market, it's all about mortgage rates.
"The nation's lack of housing supply is reasonably fixed with slow and steady changes—by building more housing inventory. However, housing demand can quickly swing and change.
"Currently, there are fewer home buyers due to high mortgage rates. If mortgage rates were to fall by one percentage point, there would be a rush of home buyers, and we would face a housing shortage again. [...]
"What happens to the housing market over the next few months and years all depends on mortgage rates. Mortgage rates are likely to be mildly lower. Home sales will be boosted with more housing demand."
The Outlook
With buyer demand weakening and inventory rising, Redfin projects that U.S. home prices will decline 1% by year's end.
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