Buying a home has always been a negotiation before it is anything else. The list price is an opening bid, the inspection report is a bargaining chip, and the side that needs the deal less usually walks away happier.
For most of the past five years, that side was not the buyer.
Buyers spent the pandemic era waiving inspections and bidding tens of thousands over asking, only to lose to someone who bid more. Then mortgage rates more than doubled from their 2021 lows, prices kept grinding higher anyway, and the paycheck required to keep up drifted out of reach for millions of households.
Plenty of would-be buyers simply quit looking. That retreat is exactly what changed the math.
When enough buyers walk away, the ones who remain inherit the bargaining power everyone else abandoned. Data released Aug. 13 shows sellers now outnumber buyers by 51.3% nationwide, just shy of December’s record, and Redfin has named the five metros where house hunters hold the most power right now.
Why the housing market flipped in buyers’ favor
Redfin, the brokerage owned by Rocket Companies (RKT), labels any market with at least 10% more sellers than buyers a buyer’s market. When the gap runs the other way, sellers are in charge. By that yardstick, nearly the entire country now belongs to buyers.
The number of active buyers fell to roughly 967,000 in July, the lowest on record and down 2.5% from June, according to Redfin. Sellers slipped to about 1.46 million, their lowest count in a year.
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That still leaves nearly half a million more homes for sale than there are people shopping for them.
The company estimates buyer counts by combining its internal data on how long house hunters take from first tour to closing with listing-service figures on active and pending sales, so the tally measures real shoppers, not casual browsers.
Two forces did most of the damage to demand. Mortgage rates climbed to their highest level in a year in July, and uncertainty over whether the Federal Reserve’s next move could be a hike kept nervous shoppers on the sidelines, the report said.
The average 30-year fixed rate stood at 6.67% for the week ending Aug. 13, according to Freddie Mac.
If you are wondering why the Fed matters to your house payment, the chain is short. Mortgage rates track the 10-year Treasury yield more closely than the Fed’s benchmark rate, and yields rise when investors expect inflation to run hot. Every time hike talk resurfaces, the 10-year climbs and mortgage quotes follow within days.
Geopolitics is not helping either. Rates have trended higher since the war in Iran began in late February, and they tick up whenever the conflict flares, according to U.S. News.
Related: Redfin reveals surprising turn in America’s housing market
“Buyers are dropping out faster than sellers,” Redfin senior economist Asad Khan said in the report. The buyers who remain, he added, have more options and more room to negotiate than they have had in years.
That last part is where your money is. More room to negotiate can mean a price cut, seller-paid closing costs, a rate buydown or an inspection contingency that actually survives the offer. On a typical purchase, those items are worth tens of thousands of dollars.
The 5 best cities to buy a home right now
Of the 49 major metros Redfin analyzed, 39 are now buyer’s markets. Five stand far above the rest, and my analysis of the metro-level table shows the gap between those five and everywhere else kept widening in July.
Here are the strongest buyer’s markets in America, ranked by how far sellers outnumber buyers:
- Miami: 154% more sellers than buyers.
- Nashville, Tenn.: 151%
- Houston: 130%
- San Antonio: 116%
- Austin, Texas: 112%
Source: Redfin’s July report
Those percentages translate into staggering raw numbers. Houston had 45,641 homes listed in July against fewer than 20,000 active buyers, according to Redfin. Even if every single shopper closed on a house, more than 25,000 listings would still be sitting there waiting for an offer.
The five cities share a common ancestor: the pandemic boom.
Miami and Nashville absorbed a wave of new construction and investor buying that is now landing just as local buyers get priced out, according to Redfin. Miami’s squeeze is compounded by surging insurance premiums, rising HOA fees and mounting climate risk. Houston, San Antonio and Austin have some of the busiest homebuilding pipelines in the country, so fresh inventory keeps arriving while demand cools.
The advantage is still building. I compared July’s metro figures against June’s, and Miami’s seller surplus jumped from 134% to 154% in a single month, Seattle’s went from 46% to 65%, and Fort Worth, Texas, climbed from 67% to 86%, per Redfin. House hunters gained ground in 34 of the 39 buyer’s markets.
You can see it on the ground, too. In Nashville, local Redfin agent Kristin Sanchez says buyers are taking their time and winning concessions because sellers know they have to negotiate, a sharp reversal from the days when listings drew multiple offers within hours.
The price data backs it up. Home prices rose just 2.3% year over year across the 39 buyer’s markets, versus 4.2% across the six remaining seller’s markets, Redfin’s figures show.
What homebuyers should do before Labor Day
Khan’s advice comes with a clock attached. He describes the stretch between now and Labor Day as an unusually good window, because motivated sellers may cut deals before an early-fall wave of returning buyers chips away at your edge.
Your metro matters more than the national headline. Just six major markets still favor sellers, led by Nassau County, N.Y., where buyers outnumber sellers by 36%, followed by Newark, N.J., Providence, R.I., and Milwaukee, according to Redfin. Those are mostly places where new construction has been constrained for years, and none of this new leverage applies there.
Bargaining power also only matters if you can afford a seat at the table. The income needed to buy a typical U.S. home sits near a record $110,000, according to a separate Redfin analysis, and at 6.67%, the monthly payment still shuts out millions of households.
But if you have the income and the down payment, the numbers say you are holding more cards this month than at any point since Redfin started counting. My read of the data is simple. In housing, power this lopsided rarely survives more than a season, and the sellers across the table know it too.
