It’s a Buyer’s Market. For Many Homebuyers, It Doesn’t Feel Like It
Redfin reports there were 3.7 months of for-sale supply on the market in January, the most in six years
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
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 up4.1% 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
“It’s
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 |
|
11.6 |
+3 |
2 |
|
11.4 |
+3 |
3 |
|
10.5 |
+2.5 |
4 |
|
10.3 |
+2.9 |
5 |
|
9.6 |
+1.8 |
6 |
|
8.1 |
+0.3 |
7 |
|
7.3 |
+0.6 |
8 |
|
6.4 |
+0.6 |
9 |
|
6.3 |
+1.1 |
10 |
|
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.
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 |
|
1.1 |
-0.1 |
2 |
|
1.2 |
-0.2 |
3 |
|
1.4 |
-0.3 |
4 |
|
1.5 |
0 |
5 |
|
1.6 |
0 |
6 |
|
1.7 |
0.1 |
7 |
|
1.7 |
0 |
8 |
|
1.7 |
-0.5 |
9 |
|
1.7 |
-0.2 |
10 |
|
1.8 |
-0.2 |
"
To view the full report, including methodology and additional metro-level insights, please visit:
https://www.redfin.com/news/buyers-market-february-2025
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Source: Redfin