It’s a Buyer’s Market. For Many Homebuyers, It Doesn’t Feel Like It

Rhea-AI Summary

Redfin (NASDAQ: RDFN) reports that the U.S. housing market has shifted in favor of buyers for the first time this decade, with 3.7 months of for-sale supply in January 2025, the highest since February 2019. Multiple indicators support this trend: pending sales dropped 6.3% to pandemic-era lows, homes are staying on market for 56 days, price growth slowed to 4.1%, and homes sold for 1.8% below asking price.

The market shows significant regional variation, with Sun Belt metros, particularly in Florida, emerging as strong buyer's markets. Cape Coral leads with 11.6 months of supply, followed by Miami and McAllen, TX. In contrast, Northeast markets remain seller-friendly, with Rochester, NY showing just 1.1 months of supply, followed by Buffalo and Hartford, CT.

Positive

• Housing market shift favoring buyers with 3.7 months of supply, highest in six years
• Increased negotiation power for buyers with homes selling 1.8% below asking price
• Expanded inventory in Sun Belt markets offering more buyer opportunities

Negative

• Pending sales declined 6.3% to lowest level since April 2020
• Home prices remain near record highs despite market shift
• Significant market disparity between regions creating uneven opportunities

Insights

Real Estate Market Analyst

The U.S. housing market is experiencing a pivotal shift that carries significant implications for Redfin's business model and market position. The reported 3.7 months of supply represents a critical inflection point in market dynamics, though this traditional buyer's market indicator requires careful interpretation in today's high-rate environment.

The regional disparities in market conditions present both opportunities and challenges for Redfin's operations. In Sun Belt markets, particularly Florida with six of the top 10 buyer's markets, increased inventory levels could lead to longer transaction cycles and potentially lower commission revenues per sale. However, the higher volume of listings could offset this impact by providing more opportunities for Redfin's technology platform to demonstrate value in matching buyers with properties.

The 6.3% decline in pending sales to pandemic-era lows, combined with homes taking 56 days to sell, signals a fundamental shift in market velocity that could pressure Redfin's transaction-based revenue model. This slowdown is particularly significant as it occurs during what traditionally should be the build-up to the spring buying season.

The divergence between Sun Belt and Northeast markets presents a strategic challenge for Redfin's resource allocation. While markets like Rochester and Buffalo maintain seller-favorable conditions with just 1.1-1.2 months of supply, the company must adapt its technology and service offerings to effectively serve these contrasting market dynamics. This market bifurcation could necessitate a more nuanced, region-specific approach to both marketing and operations.

The 4.1% year-over-year price growth and increased negotiating power for buyers (with properties selling 1.8% below asking price) suggest a market normalization that could actually benefit Redfin's technology-driven model. In a more balanced market, the company's data-driven pricing tools and market insights become increasingly valuable to both buyers and sellers seeking to navigate complex local market conditions.

Redfin reports there were 3.7 months of for-sale supply on the market in January, the most in six years

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The U.S. housing market has tilted in favor of buyers for the first time this decade, with 3.7 months of for-sale supply sitting on the market in January. That’s the most since February 2019 and up from 3.3 months a year ago, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

It’s worth noting that the picture looks different across different areas of the country, with buyers favored across Sun Belt metros, while sellers generally have more power in the Northeast and Midwest.

Historically, four to six months of supply has indicated a buyer’s market, and January was the closest the U.S. housing market has come to four months of supply since 2019.

There are a range of other data points signaling favorability for buyers ahead of the spring homebuying season:

• Sales are slow: Pending sales fell 6.3% in January to the lowest mark since the early days of the pandemic in April 2020.
• Listings are sitting longer: The typical home sold in January had been on the market for nearly two months (56 days), the longest period since February 2020.
• Price growth is slowing: The median U.S. home price was up 4.1% year over year in January, the slowest growth since September and more in line with the rate experienced in the late 2010s.
• More negotiation is possible: The typical home sold for 1.8% less than its final asking price in January, the biggest discount in nearly two years.
• Deals are falling through: Home purchases were canceled at the highest January rate since at least 2017 last month.

“Historically, a buyer’s market has been defined as when months of supply reaches 4-6 months—but old definitions don’t fit the reality of today’s market,” said Redfin Economics Research Lead Chen Zhao. “Many buyers don’t feel like they are in a buyer’s market, with home prices at near-record highs and mortgage rates elevated. But we are more than halfway through the decade and this is the first time we can say that buyers have as much, if not more, power than sellers.”

Zhao cautioned that even though the pendulum may have swung in favor of buyers, these conditions may not last long. More buyers may start to move off the sidelines when they realize there’s more inventory available.

Sun Belt metros dominate list of buyer’s markets, while sellers are still favored in the Northeast

There is more inventory for buyers to choose from—and therefore more room for negotiation—across the Sun Belt states. This is particularly the case in Florida, which has six of the top 10 major metros with the most months of supply.

Cape Coral, FL tops the list, with 11.6 months of supply in January, up from 8.6 months a year ago. Next comes Miami (11.4 months of supply, +3 months year over year), McAllen, TX (10.5 months, +2.5 months YoY), Fort Lauderdale, FL (10.3 months, +2.9 months YoY) and West Palm Beach, FL (9.6 months, +1.8 months YoY).

Florida tops the list of buyer’s markets because the pandemic-driven construction boom has increased housing supply as buyer demand dries up due to the relative lack of affordability. Demand has also dropped because of the increased risk of natural disasters and subsequent higher insurance costs.

“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. Everywhere you go, there’s a house for sale. Most sellers here know the market is bad and it’s not advantageous to sell right now, but either they’re tired of waiting for things to improve, or they really have to sell because they are moving out of state. For buyers, this means there are more opportunities to negotiate on price and terms.”

Top Buyer’s Markets (January 2025) Review of 100 most populous metro areas, ranked by months of supply
Rank	Market	Months of Supply	Months of Supply YoY (in months)
1	Cape Coral, FL	11.6	+3
2	Miami, FL	11.4	+3
3	McAllen, TX	10.5	+2.5
4	Fort Lauderdale, FL	10.3	+2.9
5	West Palm Beach, FL	9.6	+1.8
6	New Orleans, LA	8.1	+0.3
7	North Port, FL	7.3	+0.6
8	Honolulu, HI	6.4	+0.6
9	Jacksonville, FL	6.3	+1.1
10	San Antonio, TX	6	+0.4

At the other end of the spectrum, major markets across the Northeast still tilt in favor of sellers, with limited supply available due to higher buyer demand.

Rochester, NY had 1.1 months of supply in January (-0.1 months year over year), the least amount of the 100 most populous metros Redfin analyzed. Next came Buffalo, NY (1.2 months of supply, -0.2 months YoY), Hartford, CT (1.4 months of supply, -0.3 months YoY), Grand Rapids, MI (1.5 months of supply, no change YoY) and Worcester, MA (1.6 months of supply, no change YoY).

Top Seller’s Markets (January 2025) Review of 100 most populous metro areas, ranked by months of supply
Rank	Market	Months of Supply	Months of Supply YoY (in months)
1	Rochester, NY	1.1	-0.1
2	Buffalo, NY	1.2	-0.2
3	Hartford, CT	1.4	-0.3
4	Grand Rapids, MI	1.5	0
5	Worcester, MA	1.6	0
6	San Jose, CA	1.7	0.1
7	Montgomery County, PA	1.7	0
8	Albany, NY	1.7	-0.5
9	Allentown, PA	1.7	-0.2
10	Boston, MA	1.8	-0.2

"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 that are in decent shape and in sought-after neighborhoods are met with a flurry of buyers. These homes typically go quickly and for well over list price."

To view the full report, including methodology and additional metro-level insights, please visit:
https://www.redfin.com/news/buyers-market-february-2025

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219498020/en/

Contact Redfin

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the current months of supply in the U.S. housing market according to RDFN?

According to Redfin (RDFN), there were 3.7 months of for-sale supply in January 2025, the highest level since February 2019.

How much did pending home sales decline in January 2025 according to RDFN?

Pending home sales fell 6.3% in January 2025, reaching their lowest level since April 2020.

Which U.S. city has the highest months of supply according to RDFN's January 2025 data?

Cape Coral, FL had the highest months of supply at 11.6 months in January 2025.

What is the median home price growth rate reported by RDFN for January 2025?

The median U.S. home price increased by 4.1% year over year in January 2025.

How long is the typical home staying on the market according to RDFN's January 2025 data?

The typical home sold in January 2025 had been on the market for 56 days, the longest period since February 2020.