The balance of power in the US housing market has shifted further in favour of buyers, as a surge in available properties continues to outpace a shrinking pool of active purchasers.
According to a report published by Redfin, there were 46.3% more home sellers than buyers in February — a gap of nearly 630,000 people, the largest recorded in the company’s data going back to 2013. That figure represents a roughly 30% increase from a year earlier, when the mismatch stood at around 449,000, and is up from about 529,000 as recently as October.
Redfin defines a buyer’s market as one in which sellers outnumber buyers by more than 10%. On that basis, buyers have held the upper hand continuously since May 2024.
Why the Gap Has Widened
The imbalance traces its roots to the Federal Reserve’s most aggressive interest rate hiking cycle in four decades, which pushed mortgage rates sharply higher as policymakers moved to bring down inflation. That period effectively brought the pandemic-era seller’s market — characterised by soaring prices and frenzied demand — to an abrupt end.
Although the Fed began cutting rates two years ago, the housing market has largely remained frozen. The so-called “lock-in effect” has kept many homeowners with low fixed-rate mortgages reluctant to sell and take on a new loan at a much higher rate. That reluctance has constrained supply for years, contributing to elevated prices and deepening the affordability crisis.
More recently, geopolitical uncertainty has added fresh pressure. Concerns that rising oil prices could reignite inflation — and that increased defence spending could widen the deficit — have pushed Treasury yields higher, lifting borrowing costs across the economy. Mortgage rates have climbed to their highest levels since October, and application volumes fell by 10.5% in a single week, casting a shadow over the spring selling season.
“Of course, it’s only a buyer’s market for those who can actually afford to buy,” Redfin noted. “High housing costs and economic uncertainty have caused many house hunters to retreat, creating an imbalance of buyers and sellers.”
Redfin added that broader concerns — including worries about job security, inflation and global instability — are also making many Americans more cautious about taking on large financial commitments.
Buyers and Sellers Both Pulling Back
The number of active homebuyers fell 2.4% month over month in February to approximately 1.36 million. Sellers also dipped slightly, down 0.4% to an estimated 1.99 million — but the gap between the two groups remains at a record level.
The most pronounced buyer’s markets were concentrated in Sun Belt cities. Miami topped the list, with sellers outnumbering buyers by 163%, followed by Nashville at 120%, Austin at 112%, West Palm Beach at 110% and San Antonio at 104%. Many of these cities experienced rapid in-migration during the remote-work era of the pandemic, prompting a wave of new construction. With affordability now under severe strain, that additional supply is weighing heavily on demand.
Contract Cancellations Hit Record High
A separate set of Redfin data on contract cancellations underlines just how cautious buyers have become. More than 42,000 home sale agreements were cancelled in February, representing 13.7% of all homes that went under contract — the highest February share in records dating back to 2017, and up from 12.8% a year earlier.
Cancellations occur for a variety of reasons: buyers may find a more attractive property during the inspection period, decide not to proceed after an issue is flagged, or simply get cold feet and wait in the hope that something better will come along. In the current climate, all three scenarios appear to be playing out with increasing frequency.