The U.S. housing market, which overheated during the COVID-19 pandemic, is rapidly transitioning from a seller’s market to a buyer’s market, according to recent analyses. In some areas, a supply-demand reversal has emerged, with listings outnumbering buyers by up to three times.

Real estate platform Redfin reports that in April, the number of homes listed for sale nationwide exceeded buyer demand by 500,000. This marks the largest supply surplus since 2013. Redfin estimates there were 1.9 million sellers compared to 1.5 million buyers, a 34% (approximately 490,000) surplus of sellers, the highest on record and a 27.5 percentage point increase from last year’s 6.5% seller surplus. Industry standards classify a market as a buyer’s market when sellers outnumber buyers by 10% or more, and a seller’s market when the reverse is true.

Of the top 50 U.S. metropolitan areas, 30 have shifted to buyer’s markets. Miami stands out, with sellers outnumbering buyers by over three to one. Similar trends are observed in southern cities like Atlanta, Austin, Phoenix, and Tampa.
Experts note, “Buyers are holding back, forcing sellers to lower prices to close deals,” predicting continued downward pressure on prices. However, the situation varies by property type. Condos have an 83% seller surplus, while single-family homes have a lower 28% surplus due to higher buyer demand.

Home prices, which surged post-pandemic, are now cooling. In May, national home prices rose just 1.4% year-over-year, down from 2% in April. Among the top 100 cities, 24 saw year-over-year price declines, primarily in the Sun Belt regions that overheated during the pandemic.
Redfin’s research director, Chen Zhao, said, “Nationwide home prices remain too high, delaying demand recovery. Homeowners can no longer postpone selling, leading to increased market activity.” The recent surge in listings is attributed to “need-based” sellers driven by job relocations, childbirth, or moves.

Challenges for buyers include a record-high median home price of $431,931 in April, a record-high monthly payment of $2,868, mortgage rates more than double pre-pandemic levels (6.73% in April), and economic uncertainty from trade tensions and inflation.

The industry predicts a prolonged demand recovery, with further price adjustments likely in some regions. As the market shifts to a buyer’s market, home prices are expected to decline by about 1% by year-end. With price growth already slowing from 6.2% early this year to 1.6%, and buyer’s market conditions persisting alongside stable interest rates, further price drops are anticipated. This slowdown is expected to draw first-time buyers back to the market.

Sellers are already lowering listing prices. Redfin reports that only 28% of sellers achieved their desired price, down 4 percentage points from last year and a stark contrast to 2022, when 53% sold at a premium. Listings have increased by over 5% compared to last year, and the share of homes entering escrow within two weeks of listing dropped to 37.6%, the lowest since 2020, signaling a potential price downturn by August.

By Hwandong Jo