Good News For Buyers: It’s No Longer A Seller’s Market

For years, home sellers have held the best cards in the deck, commonly trumping buyers in the housing market game. But new numbers suggest that buyers are turning the tables and could have the upper hand in many markets.

This is welcome news for house hunters, despite continued high home prices and elevated mortgage rates. Let’s take a closer look at the latest findings, how they should be deciphered, other green flags buyers should pay attention to, and best practices for buyers in the months ahead.

A new Redfin study reveals that several recent housing market trends point toward a shift to a buyer’s market:

• Just over 28% of American homes are now selling above asking price – down from 32% a year prior and well below the 53% observed in 2022, with every major metropolitan market noticing declines.
• Pending home sales fell 1.1% year-over-year to their lowest level on record for this time of year.
• Merely 37.6% of homes went under contract within two weeks, the slowest spring market pace since 2020.
• The median sale price of $397,000 was almost 7% ($29,000) below the median list price – a sharp contrast to market conditions observed in 2021 and 2022, when sale prices routinely exceeded asking prices.
• There are 34% more sellers than buyers in the market right now; this is the first time in Redfin’s records dating back to 2013 that sellers have outnumbered buyers by this margin.

How to interpret this data

For proper context here, it’s helpful to consult with trusted real estate experts, who were mostly unanimous in decoding these numbers.

“The Redfin data echoes what many of us have been seeing firsthand, and it perfectly mirrors what I’m seeing in my market,” says Gary Lanham, a broker associate with Coldwell Banker Realty in Fort Lauderdale, who also cites a recent Wall Street Journal article that reported a half million more sellers in April than buyers – the largest imbalance noticed since 2013.

“What’s driving this trend is overpriced homes rooted in outdated 2021 to 2022 expectations from sellers, affordability pressures, lingering inventory due to weak presentation of homes for sale or unrealistic seller goals, and a quiet but building wave of expired listing – properties that simply missed the mark. This isn’t a housing crash: it’s a market rebalancing.”

Marc Halpern, CEO of Foundation Mortgage, seconds those sentiments.

“The Redfin data is a clear indicator that the housing market is undergoing a meaningful shift in balance. We are seeing a softening of demand relative to supply, which is not surprising given the combination of elevated mortgage rates, persistent affordability challenges, and general economic uncertainty,” he says. “Sellers are no longer commanding bidding wars in most markets, and buyers have more time and leverage. This rebalancing is a natural correction after years of overheated activity.”

Although prices haven’t dropped much, they’ve finally stopped climbing at the same pace.

“At the same time, we are seeing a wave of demand coming from people who have been on the sidelines the past couple of years. These are often first-time buyers or people with tighter budgets who now feel like they at least have a shot,” explains Eric Bramlett, a Realtor and owner of Bramlett Real Estate.

Consider that more homeowners are listing properties lately, particularly those who bought or refinanced before mortgage rates spiked and who are now looking to cash out their peak equity.

“That imbalance – more sellers than buyers – creates downward pressure on prices and longer days on the market,” notes Ryan Zomorodi, co-founder of Real Estate Skills.

Do the experts agree?

Ask Shaun Michael Lewis, CEO of Clearwater Properties in Whitefish, Montana, and he’ll tell you that this is not a confirmation that we have entered into a definitive buyer’s market.

“I would classify it as a market transition. The shift is more nuanced and geographically varied than major headlines seem to suggest,” he says. “Buyers have attained some negotiating power and choice, but sellers with realistically priced, well-positioned properties aren’t experiencing major distress.”

Eithan Davidov, founder and principal agent with The Davidov Team at Compass in New York City, is simpatico with those thoughts. He also calls this a “transitional phase,” although one where the power dynamic has absolutely shifted in favor of buyers in many parts of the nation.

“But remember that real estate remains hyper-local. In markets like New York City, prime neighborhoods with well-priced, turnkey inventory are still competitive. Yet even here, we are seeing sellers get more realistic,” adds Davidov. “The days of pricing 10% over market price and expecting a bidding war are gone unless the home is best in class.”

It’s a welcome sign for home seekers that fewer homes are selling above asking price, pending home sales are at record seasonal lows, properties are taking longer to sell, and sale prices are averaging 7% below list price: all of which are strong signals that momentum has shifted away from sellers.

“But here’s the catch: mortgage rates are still high, and the Federal Reserve just announced that it is holding off rate cuts due to lingering inflation,” Zomorodi continues. “That uncertainty is keeping many buyers on the sidelines, even though sellers are more flexible today. So, I would say the overall market is still in a holding pattern. Until rates drop or affordability improves, we are in more of an intermediary phase. There’s opportunities here for buyers, certainly, but not without caution.”

Other positive signs for buyers

More good news: The Mortgage Bankers Association reports that mortgage-purchase applications were up 10% week-over-week at the time of this writing, which signals that there is a level of pent-up demand ready to activate as conditions continue to improve, even if gradually.

“Also, buyers are more educated and less emotional today, looking at deals through a smarter financial lens,” notes Davidov. “Savvy buyers are negotiating better terms, getting seller credits, and leveraging rate buydowns to soften monthly payments.”

Indeed, seller concessions are returning as a viable negotiation tool.

“We are successfully negotiating closing cost assistance, inspection-related repairs, and mortgage rate buydowns that effectively improve buyer affordability without requiring list price reductions that sellers often resist,” Lewis points out.

Zomorodi adds that we are also seeing renewed interest from house hunters in new construction, which often comes with builder incentives like closing cost assistance, something resale homes usually don’t offer.

“And many would-be buyers are adjusting their expectations rather than exiting the market altogether as they would have in years past. Instead of waiting for the perfect time, they’re exploring creative financing options, widening their search radius, and focusing on long-term value,” he continues.

Lanham credits more robust search technology nowadays, including AI-based tools, with helping buyers make more informed decisions faster.

There’s been a rise in foreign interest and investor activity, too, both signs that we’re nearing the bottom of the curve.

“This moment is a huge opportunity for move-up buyers, as well. If you are selling and buying in the same market, the relative discount on your next purchase may outweigh the smaller gain on your sale,” says Davidov.

How should buyers proceed in the current market?

Considering the shifting market conditions, careful preparation and strategic positioning can reap major rewards for buyers right now. The pros recommend the following strategies to help you find and pay less for a preferred property:

• Check and improve your credit. Strive to raise a credit score below 640, aiming instead for a score in the 700s or higher. You can raise your score by paying down your existing debts, keeping your credit utilization low (not maxing out your spending limits), not opening any new loans/credit accounts or closing any existing ones, and most importantly, paying your bills on time with no missed payments. Additionally, check your credit reports and work to correct any inaccuracies or errors you spot.
• Shop around for loans and get preapproved. Having a loan preapproval letter demonstrates to sellers that you are a serious buyer. “Engage with lenders early in the process to better understand precise qualification requirements – including government-backed loans like FHA and USDA home loans,” suggests Lewis.
• Crunch your financial numbers. Know what you can afford and the total costs of a mortgage loan over its full term; don’t just focus on what the monthly payment or interest rate will be. Give serious thought to your long-term homeownership plans.
• Explore down payment assistance programs. Several options may be available in your area, offering grants or loans that can help fund your closing costs and/or down payment.
• Save up for a sufficient down payment. If you don’t qualify or pursue a USDA loan or VA loan (both of which require no down payment), prepare to put down at least 3% for a conventional loan or 3.5% for an FHA loan. But be aware that you will have to pay for mortgage insurance if your down payment is less than 20%. Keep in mind that the larger your down payment, the less money you’ll have to borrow and the less you’ll pay and total interest over the life of your loan.
• Collaborate with an agent you trust. Choose an agent who understands current market dynamics, knows your area inside and out, has strong lender relationships, and possesses vast experience negotiating offers.
• Hone in on the right properties. “Focus on homes that have been on the market for 30 to 45 days, as these sellers are typically more motivated and realistic about market conditions,” adds Lewis. “Target homes where you can compete on terms beyond price, such as flexible closing dates, minimal contingencies, or willingness to accept properties in good but possibly not perfect condition.”
• Be prepared to act fast and pivot if necessary. “Be ready to negotiate after making an offer on a home, but also be willing to walk away from the deal if it doesn’t make financial sense,” recommends Davidov.

The bottom line

It’s refreshing that buyers enjoy a more favorable position nowadays than they have in recent years. Take advantage of what could be a limited window of opportunity to possibly purchase for less by scrutinizing your finances and partnering with a reputable agent and lender.

“With more listings and less competition, you have room to negotiate and more time to make smart decisions,” says Zomorodi. “Navigating this market successfully isn’t about waiting for the perfect time: it’s about understanding how to act decisively when your opportunity comes.”