Sellers in the U.S. housing market currently outnumber buyers by about 500,000, according to the latest Redfin data—the biggest gap on record since the real estate brokerage started collecting data in 2013.
This imbalance has deepened over the past few months, as the country’s housing market slowed to a crawl due to growing economic uncertainty, elevated borrowing costs, and rising home prices, which kept buyers on the sidelines.
Officially, it means that Americans are facing the most buyer-friendly market they have seen in years, with many sellers willing to slash prices to stand out from the competition. But on the ground, there is widespread frustration on both sides, experts warn.
How Did We Get Here?
Home prices soared across the country during the pandemic, as historically low mortgage rates, the rise of remote work, and a renewed focus on the domestic space sparked a nationwide homebuying frenzy.
Those hoping to snatch a home in this busy period faced limited options on the market, as the country’s developers had chronically underbuilt compared to demand in the years following the subprime mortgage crisis, leading to ruthless bidding wars and climbing home values.
According to the Harvard Joint Center for Housing Studies, home prices rose by more than 30 percent in nearly two-thirds of counties between March 2020 and March 2023. While the pace of home price growth has slowed down since then, prices are still much higher than in 2019—and in many parts of the country, they are still rising.
Faced with climbing prices and stubbornly high mortgage rates, buyers started withdrawing from the market this year. Meanwhile, many sellers who locked into their homes with lower monthly payments decided to stop waiting for rates to come down or were forced by personal situations to put their properties on the market.
As a result of these opposing trends—sellers flocking to the market while buyers withdrew—the number of homes for sale across the nation surged to over 2 million this summer, a level unseen since the pandemic hit.
Last month, according to Redfin, there were 2.06 million homes for sale across the U.S., spending an average of 50 days on the market before going under contract. This is eight more days than a year earlier, and the slowest pace for this time of the year in nearly a decade. The median sale price of a typical U.S. home in the same month was $435,545, up 1.7 percent from a year earlier.
What Does This Mean for Buyers?
When housing experts first started noticing that the gap between sellers and buyers was approaching a record 500,000, they predicted that the imbalance on the market would bring down prices. In May, Redfin said it expected home prices to fall by 1 percent year-over-year by the end of 2025, citing the growing gap between sellers and buyers.
“The balance of power in the U.S. housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall. Many are still holding out hope that their home is the exception and will fetch top dollar,” said Redfin senior economist Asad Khan. “But as sellers see their homes sit longer on the market and notice fewer buyers coming through on tour, more of them will realize that the market has adjusted and reset their expectations accordingly.”
This prediction is based on precedent. The last time that sellers significantly outnumbered buyers, in November 2018, home-price growth shrank to the lowest level in at least six years, with prices rising 2 percent from a year earlier to $283,912.
And the gap at the time was only 9.4 percent. Today, it is even greater at 36.7 percent, suggesting that there is more pressure on prices to come down. Price growth has remained fundamentally flat in recent months and is now much lower than in previous years.
In September, according to Redfin, the typical home sold for 1.4 percent less than its final list price, compared with 0.9 percent less last September—the biggest discount scored by U.S. homeowners since 2019. Despite this, buyers remain cautious as home prices continue to rise and mortgage rates remain more than double the pandemic lows of 2-3 percent.
And Sellers?
Sellers who expected their homes to fetch the same that they would have a couple of years ago have had a hard time adjusting their expectations to the new reality of the U.S. housing market.
But many, despite some bitterness, have shown themselves to be willing to meet buyers where they are at, lowering their original asking price and offering other benefits, including repair works.
“There continues to be a divergence between sellers and buyers, and the increased price cut activity tells us that sellers are increasingly abandoning the wait-and-see strategy and are more motivated to sell,” Jason Lewris, co-founder of Parcl Labs, told Newsweek.
“Sellers can’t be picky on price. If they don’t have the lowest price on the market, they’re not even going to get showings,” Roze Swartz, a Redfin Premier agent in Houston, said in a press release shared with Newsweek.
“That’s a tough pill to swallow, but it’s better to price low from the start than price high and make a drastic cut after your home has been sitting on the market for months without any offers.”
But many sellers who were not desperate to sell have been quietly taking their properties off the market, Redfin data shows. Last month, active listings fell roughly 1 percent year-over-year to 1.96 million, the lowest level since February, while still up 8 percent from a year earlier.