Supply is climbing while pending sales hit a six-month low, shifting leverage toward buyers in cities like Miami, Nashville and across Texas—especially for homes that have sat on the market for weeks.
Source: Original report
Supply Climbs, Demand Retreats
The U.S. housing market entered a notably softer phase in late August, with new listings ticking up 0.4% week over week during the four weeks ending August 23—reaching their highest point since April, according to Redfin. Total available inventory also expanded, rising 0.5% from the prior week to its highest mark since May.
At the same time, buyer activity pulled back sharply. Pending home sales dropped 1.1% week over week, falling to the weakest level recorded in six months. The divergence between growing supply and shrinking demand is handing motivated buyers unusual negotiating power heading into the fall season.
Affordability Pressures Keep Buyers Cautious
The retreat in demand is largely a function of stubbornly high housing costs. The national median home-sale price climbed roughly 1.9% year over year, crossing above $400,000. Meanwhile, the weekly average mortgage rate stood at 6.65%—marginally below a recent 13-month high but still elevated enough to strain household budgets and push some prospective buyers to the sidelines.
Economic uncertainty is also weighing on sentiment. A portion of would-be purchasers are choosing to wait, hoping that rates could ease in the months ahead before committing to a purchase.
Where Buyers Hold the Most Leverage
Redfin's data identified several markets where conditions have tilted decisively in buyers' favor, including Miami, Nashville and large portions of Texas. In those areas, buyers may find sellers willing to accept below-asking offers, cover closing costs, or provide concessions such as a mortgage-rate buydown. West Palm Beach, Florida was also singled out in the underlying data, reflecting a broad softening across Sun Belt metros that saw outsized pandemic-era appreciation.
A supplemental analysis identified late August and early September as historically favorable windows for buyers in at least 11 major metro areas, spanning much of California, the Seattle region and a pair of suburban New York markets.
Strategy Advice for Both Sides of the Transaction
Redfin's head of economics research, Chen Zhao, recommended that active buyers focus on listings that have been sitting unsold for several weeks, as those sellers are more likely to entertain price reductions or concession requests. Zhao also urged sellers to base their asking prices on current market conditions rather than what comparable homes fetched one or two years ago, warning that overpricing a home risks an extended time on market and missed opportunities with serious buyers.
What to Watch Going Into Fall
The Labor Day holiday traditionally marks a turning point in housing-market activity, with some analysts expecting a modest uptick in buyer engagement once the summer slowdown passes. Whether that seasonal lift materializes this year will depend heavily on where mortgage rates head in the coming weeks. For now, the combination of rising inventory and hesitant demand means the negotiating window for well-prepared buyers remains open—but potentially not for long.
