SEATTLE, WA — The U.S. housing market edged closer to a buyer’s market in January, as supply surged to 3.7 months of for-sale inventory, the highest level since February 2019, according to a report from Redfin. This marks a significant shift in market dynamics, with buyers gaining leverage for the first time in years, despite stubbornly high home prices and elevated mortgage rates.
Historically, a buyer’s market is defined by four to six months of housing supply. While the current inventory level is shy of that benchmark, the increase from 3.3 months a year ago signals growing options for homebuyers ahead of the spring buying season.
“This is the first time we can say that buyers have as much, if not more, power than sellers,” said Chen Zhao, Redfin Economics Research Lead. “But many buyers don’t feel like they’re in a buyer’s market, with home prices at near-record highs and mortgage rates elevated.” Zhao noted that these conditions might not last, as more buyers could re-enter the market once they notice the increased inventory.
Trends Favor Buyers, but Challenges Persist
January presented several trends in buyers’ favor. Pending home sales fell 6.3%, reaching their lowest point since April 2020, while listings lingered on the market for an average of 56 days, the slowest pace since February 2020. Price growth cooled, with the median U.S. home price climbing just 4.1% year over year—the slowest rate since September. Additionally, homes sold at a 1.8% discount to their final asking price, the largest margin in nearly two years, and canceled deals hit their highest January rate since at least 2017.
Regional Differences Define Buyer vs. Seller Power
Regional disparities remain a defining factor in today’s market. Sun Belt metros heavily favor buyers, with several Florida markets leading the way due to increased housing supply. Cape Coral, FL ranked first with 11.6 months of inventory, up from 8.6 a year ago. Other buyer-friendly areas include Miami, Fort Lauderdale, and West Palm Beach, all with double-digit inventory levels.
The Sun Belt’s shift to a buyer’s market stems from the pandemic-driven housing boom, which created excess supply as demand waned. Rising natural disaster risks and higher insurance costs further dampened buyer interest in these areas.
“It’s 100% a buyer’s market right now,” said Bryan Carnaggio, a Redfin Premier agent in Jacksonville, FL. “There’s a ton of inventory. Most sellers know the market is bad, but they’re either tired of waiting or need to move out of state. For buyers, this creates opportunities to negotiate on price and terms.”
Conversely, markets in the Northeast and Midwest remain seller-friendly, supported by tight supply and robust buyer demand. Rochester, NY had just 1.1 months of inventory, the lowest among the 100 most populous metros, followed by Buffalo, NY and Hartford, CT.
“Rochester’s seller’s market is driven by a severe shortage of homes for sale, and few homeowners have chosen to list during this year’s cold, snowy winter,” said Kimberly Hogue, a Redfin Agent in Rochester. “Home listings in good condition and desirable neighborhoods attract a flurry of buyers and often sell quickly above listing price.”
Outlook
The U.S. housing market’s tilt toward buyers in January offers hope for those seeking more favorable conditions after years of intense competition. However, elevated prices and interest rates continue to pose challenges. Looking ahead, whether buyers sustain their newfound leverage will depend on economic conditions, inventory levels, and spring market activity. For now, the pendulum is slowly but steadily swinging toward buyers’ favor.
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