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By Giulia Carbonaro
Senior Reporter
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After years of shortages, partly due to homeowners holding on to cheaper mortgage payments, the United States housing market now has nearly 500,000 more sellers than buyers, according to a new Redfin report. It is the highest number since the company started keeping track in 2013.
It also represents a significant mismatch between supply and demand, which is likely to bring down home prices, according to the real estate brokerage's experts, providing some relief to struggling prospective homebuyers.
Why It Matters
Low mortgage rates during the pandemic sparked a homebuying frenzy that drove home prices across the U.S. through the roof, especially in the hottest markets like Florida and Texas, as buyers competed for limited inventory. This frenzy quickly fizzled out after mortgage rates surged in 2022 as a result of the Federal Reserve's aggressive rate-hiking campaign to bring down inflation.
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However, higher mortgage rates also had a lock-in effect on existing homeowners, incentivizing them to hold onto their cheaper monthly payments and postpone any plans to sell their properties until rates might come down. Between the end of last year and the beginning of 2025, however, homeowners began to realize that this time might not come anytime soon, and they put their properties on the market.
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But what they found is not the same market it was a few years ago, where multiple buyers fought ruthless bidding wars to snatch one property. Many prospective buyers have since been pushed to the sidelines by rising costs, while others may be reconsidering buying a home this year amid growing economic uncertainty surrounding President Donald Trump's tariff policies.
The result is that much of this rising inventory remains idle on the market, and sellers are increasingly being forced to lower prices to attract cautious buyers.
What To Know
In April, according to Redfin data, there were a total of 1,943,699 sellers in the U.S. market compared to 1,453,638 buyers—33.7 percent more sellers than buyers. Only a year ago, sellers outnumbered buyers by just 6.5 percent, while two years ago, there were actually more buyers than sellers.
In other words, the U.S. housing market has quickly shifted in favor of buyers, who now have the upper hand over sellers, even if, with home prices still rising and mortgage rates hovering around the 7 percent mark, it may not seem that way.
According to Redfin experts, two things are happening on the market simultaneously: the number of sellers has risen to levels unseen since March 2020, while the number of buyers has shrunk to the smallest size since the real estate brokerage began tracking data in 2013.
On the one hand, sellers have given up waiting for mortgage rates to come down and have made peace with a new monthly payment plan that may be more expensive than their previous one.
On the other hand, buyers are still struggling with strained affordability due to high prices and elevated mortgage rates. In April, the median sale price of a typical U.S. home was $431,931, up 1.6 percent from a year earlier. The average 30-year fixed-rate was 6.73 percent, more than double the record low reported during the pandemic.
The result is that demand is shrinking at the same time as inventory is finally rising, with 44 percent of homes in April sitting on the market for over 60 days before going under contract—enough to be considered "stale" listings.
Certain markets are faring much worse than others. In the single-family home market, there were about 27.8 percent more sellers than buyers in April, according to Redfin. But in the condo market, there were as many as 83 percent more sellers than buyers in the same month.
What is happening in the condo market is that many owners are trying to sell their properties to avoid rising homeowner association (HOA) fees and insurance costs, a phenomenon that is particularly evident in Florida, where a new building safety legislation has caused a surge in condo listings over the past year.
The condo market also reveals what happens when there is a significant gap between buyers and sellers, and what is likely to occur in the overall housing market, with this imbalance putting pressure on prices. In the condo market, prices increased by only 0.4 percent year-over-year, compared to single-family home prices, which rose by 1.5 percent.
What People Are Saying
Redfin Senior Economist Asad Khan said in a press release: "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.
"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."
Tim Harper, a Redfin Premier real estate agent in Daytona Beach, Florida, said in a press release: "It has absolutely shifted to a buyer's market, which means house hunters have a lot more options—and room to negotiate.
"It's not uncommon for a buyer to get a home for 5 percent less than the list price and $10,000 in seller concessions. That's why it's important for sellers to make sure their home is in tip-top shape. We're frequently recommending sellers do a lot of cosmetic repairs and maintenance to get buyers' attention and stand out from the crowd. And of course, don't overprice."
What Happens Next
As homebuyers now have more options and more negotiating power on the market, sellers are likely to be forced to reconsider their expectations and significantly cut their asking prices.
Redfin, which initially expected the pace of home price growth in the U.S. to slow down throughout 2025, now anticipates prices will decline by 1 percent by the end of the year.
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