The US housing market is showing clear signs of shifting in favor of buyers, but financial barriers remain steep for many would-be homeowners, Axios reports.
According to recent estimates from real estate firm Redfin, there are nearly 500,000 more home sellers than buyers across the country — marking the widest gap between supply and demand since the company began tracking such data in 2013.
Currently, sellers outnumber buyers by 33.7%, a significant jump from just 6.5% one year ago. Two years ago, the dynamic was reversed, with buyers outpacing sellers amid intense competition and soaring prices. The reversal signals a substantial shift in market dynamics — at least on paper.
The data reflects a market where inventory is growing, but purchasing power is constrained. The twin challenges of elevated mortgage rates and persistently high home prices are deterring many potential buyers, particularly first-time purchasers. The median home sale price in the first quarter of 2025 stood at $417,000 — up 33% from early 2019 and outpacing both inflation and wage growth.
Layered on top of affordability concerns are broader economic headwinds. Continued uncertainty around tariffs, rising layoff fears, and actual job losses — especially among federal workers — are contributing to a subdued appetite for home buying.
On the seller side, the so-called “mortgage rate lock-in effect” — where homeowners resist selling because it would mean taking on a higher mortgage rate — appears to be easing. As Redfin notes, factors like job changes, return-to-office mandates, and personal circumstances are pushing some to list their homes regardless of market conditions. Moreover, the public has begun to adjust to the new reality of higher rates, which spiked sharply in 2022 and have remained elevated since.
Despite the growing number of listings, affordability remains a key obstacle. The National Association of Realtors recently highlighted that homeownership is still financially out of reach for a significant share of Americans. While the market may technically favor buyers, many lack the resources to take advantage.
Some price adjustments are occurring. Redfin reported home price declines in 11 of the 50 largest US metro areas over a recent four-week period, including cities such as Austin, Oakland, and Tampa. However, the national trend remains modest — with Redfin projecting only a 1% price drop by the end of 2025.
“The balance of power in the US housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall,” said Asad Khan, a senior economist at Redfin.
