The U.S. housing market shifts in favor of homebuyers, but affordability remains a challenge
The current spring buying season presents a peculiar scenario in the housing market. While there is an increase in the number of homes available for sale, the high prices are deterring many potential buyers, resulting in fewer sales. Sellers are beginning to realize that they no longer hold all the power, leading to more concessions being offered.
This marks a significant change from the seller’s market seen during the pandemic. Factors such as remote work and low mortgage rates had driven the market to favor sellers, creating bidding wars and pushing prices to new heights. However, with rising mortgage rates over the past two years, the tables have turned, and sellers now outnumber buyers, leading to a gap of nearly 500,000 – the largest on record since 2013, as affordability becomes a growing concern.
While the national trend leans towards a buyer’s market, the situation varies across different cities due to factors like high prices and borrowing costs. Understanding whether you are in a buyer’s or seller’s market, and knowing where each side holds the most leverage, is crucial for navigating the current real estate landscape.
Differentiating between a buyer’s and a seller’s market
Buyer’s market
A buyer’s market is characterized by an excess of supply over demand. In this scenario, buyers have more negotiating power and are likely to receive concessions from sellers. This can lead to a cooling off of home prices, which, ironically, can stimulate competition and shift the advantage back to sellers.
Seller’s market
Conversely, a seller’s market occurs when demand surpasses supply, resulting in heightened competition and bidding wars among buyers. Sellers typically have the upper hand in negotiations and often sell homes above the asking price, leading to an increase in property values.
Prominent buyer’s markets in 2025
Certain metros, primarily in the Sun Belt region, are witnessing a surplus of sellers over buyers, giving buyers more bargaining power. The surge in homebuilding during the pandemic has led to an oversupply of homes in these areas, dampening buyer demand due to escalating prices, climate concerns, and rising insurance expenses.
Notable seller’s markets in 2025
In contrast, several metros in the Rust Belt region are experiencing a shortage of homes due to limited construction post-pandemic. This imbalance between supply and demand has caused prices to soar, with cities like Newark seeing significant year-over-year price increases.
Determining your market position
While the national housing market may favor either buyers or sellers, local markets exhibit diverse trends, necessitating thorough research to understand the prevailing conditions in your area. Consulting with a local real estate agent, monitoring housing inventory, tracking price trends, and keeping an eye on mortgage rates are key indicators to assess whether you are in a buyer’s or seller’s market.
Strategies for buyers and sellers in different markets
- In a buyer’s market: Buyers have the advantage of negotiating lower prices, longer listing durations, and increased flexibility from sellers. It’s an opportune time to secure a desirable property at a favorable price with less competition.
- In a seller’s market: Sellers hold the upper hand, with homes selling quickly and often above the asking price. Buyers need to act swiftly and present strong offers to compete effectively in this competitive environment.
Anticipated trends in the housing market
Despite economic uncertainties impacting the housing sector, signs of stabilization are emerging, with prices beginning to plateau or even decrease in certain regions. Sellers are adjusting to higher mortgage rates, leading to a potential improvement in inventory levels. As the extended seller’s market phase wanes, buyers with suitable budgets are advised to capitalize on the current lull in competition.
Methodology
The content is based on insights from a May 2025 Redfin report, analyzing data from April 2025. The methodology is seasonally adjusted and dates back to 2013. For a comprehensive understanding, refer to the original report.