Number of homebuyers hits lowest level in at least 13 years
(NewsNation) — Home sellers are facing the smallest pool of buyers in more than a decade.
Redfin estimates there were about 967,000 buyers actively in the market in July — the fewest in any month going back to 2013.
July's active buyer estimate was down 2.5% from June and came as mortgage rates rose to their highest level in nearly a year.
The ongoing buyer retreat has steadily widened the gap with sellers, who now outnumber house hunters by roughly half a million nationwide, Redfin estimates.
"High housing costs and widespread economic uncertainty have caused many would-be buyers to back off in recent years, creating the imbalance of buyers and sellers we see today," Redfin said in the report published Thursday.
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Today's imbalance underscores just how dramatically the housing market has flipped since the pandemic-era homebuying frenzy in 2021, when buyers outnumbered sellers and bidding wars were common.
That dynamic shifted as home prices soared and mortgage rates climbed, pushing more buyers to the sidelines.
As recently as 2023, there were roughly the same number of buyers and sellers, according to Redfin's estimates, but the gap has steadily widened as affordability pressures have worsened.
In July, the median existing-home sale price hit $434,100, marking the 37th consecutive month of year-over-year price increases, according to the National Association of Realtors.
The 30-year fixed-rate mortgage averaged 6.67% this week, up from 6.58% a year earlier and more than double the sub-3% rates in 2021.
So far, the seller surplus has yet to translate into a meaningful pickup in sales, suggesting an ongoing disconnect between what sellers hope to get and what buyers are willing to pay.
But with more sellers competing for fewer buyers, those still in the market have additional leverage to bridge that gap.
Top buyer's markets are in Florida and Texas
Miami was the nation's strongest buyer's market in July, with roughly 11,000 more sellers than buyers, according to Redfin. Sellers also outnumbered buyers by nearly two to one in Orlando and West Palm Beach.
Likewise, Houston, San Antonio, Austin and Dallas had some of the nation's largest seller-to-buyer imbalances among major metros.
Both Florida and Texas have seen home price growth cool after a pandemic surge, in part because they have been building more homes than any other states, increasing inventory.
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Of the 50 major U.S. metros Redfin analyzed, roughly 75% were considered buyer's markets in July, meaning there were at least 10% more sellers than buyers.
"Buyers are dropping out faster than sellers, giving the buyers who remain more options and more negotiating power," Asad Khan, a senior economist at Redfin, said in a statement.
The exceptions — cities where sellers still have the upper hand — are concentrated in the northeast.
Buyers outnumber sellers in Boston and Providence, as well as Nassau County, New York and Montgomery County, Pennsylvania. That's also true in Newark and New Brunswick, New Jersey.
Milwaukee and San Francisco were the only two major markets outside the Northeast where there were more buyers than sellers in July.
Redfin estimates the number of active buyers by combining publicly available MLS data with its own proprietary data on how long buyers spend searching for a home in each metro area. The number of sellers in the market is simply the number of active listings in the MLS.
Top 10 buyer's markets in July, according to Redfin
Percent by which sellers outnumber buyers
Miami, FL: 154%
Nashville, TN: 151%
Houston, TX: 130%
San Antonio, TX: 116%
Austin, TX: 112%
Las Vegas, NV: 103%
Dallas, TX: 99%
Phoenix, AZ: 99%
Orlando, FL: 99%
Atlanta, GA: 88%
Source: Yahoo Finance