This summer will go down as one of the strongest buyer’s markets on record as sellers exceeded buyers by more than half a million across the country in August. The imbalance is the result of potential homebuyers retreating to the sidelines as home prices continue to soar and high mortgage rates make owning less affordable, according to a Redfin report.
An estimated 1.44 million people were looking to buy a home during August, which is the lowest level dating back to 2013, except for at the beginning of the pandemic when the housing market ground to a halt, said Redfin. Mortgage rates have started to fall, but that has spurred more refinancing activity among existing homeowners than demand from buyers.
“Buyers may show up in greater numbers if mortgage rates keep falling, which could happen if the economy continues to weaken,” said Chen Zhao, Redfin’s head of economics research. “If the economy slows further, the Fed may cut rates more than expected, but the catch is that a slowing economy could push the U.S. into a recession.”
Lower interest rates could draw buyers back into the market, which would benefit sellers. Redfin said sellers have also been sidelined along with buyers, with only 1.94 million homes on the market in August, the lowest level in nearly a year. Listings peaked at 1.99 million in May.
Redfin said a decrease of roughly 50,000 sellers since May does not reflect a seasonal shift but rather an uptick in delistings after homes sit for months with no interest. Other sellers are opting not to list at all after seeing neighboring houses selling for less than the asking price.
Florida and Texas were the strongest buyer’s markets in August. Miami had 143% more sellers than buyers during the month, the largest imbalance among the 50 most populous metro areas, according to Redfin. Austin had 131% more sellers than buyers, while Fort Lauderdale posted 128% more. That's followed by West Palm Beach with 116% and San Antonio, with 111% more sellers.
Across the country, 33 of the top 50 markets favored buyers, while 12 were balanced and five were sellers’ markets. The buyer’s markets are concentrated in the Sun Belt and on the West Coast, while balanced markets and seller’s markets skew more toward the Midwest and East Coast, said Redfin.
The strongest seller’s market in August was Newark, where 10,120 buyers were vying for 5,771 properties for sale. The other four seller’s markets were Nassau County, New York; Montgomery County, Pennsylvania; New Brunswick, New Jersey; and Cleveland.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.