As spring homebuying season approaches, prospective buyers are finding themselves with the upper hand — sort of.
Interest rates are still high, as are home prices. But the lucky few who can overcome those affordability hurdles have the most inventory to choose from in years. Homes are lingering on the market longer in many parts of the country, giving buyers more negotiating power and helping keep a lid on prices for the first time in years.
The shifting fortunes are the latest sign that the housing market may finally be exiting a deep freeze that started in mid-2022, when mortgage rates and home prices rapidly rose in tandem, pricing millions out of the market and sending home sales plummeting.
Active listings in February were 27.5% higher than a year earlier, an encouraging sign considering that market dynamics like mortgage rates and all-in prices haven’t changed much, said Hannah Jones, senior economic research analyst at Realtor.com.
“It’s such a great step in the right direction toward balance,” Jones said.
Price cuts are also on the rise, a sign that sellers are growing more motivated. According to Zillow, nearly 23% of sellers lowered prices in January, the largest proportion for the month since the real estate website began tracking it in 2018.
In Colorado Springs, Colo., real estate agent Kevin James Bond said he’s been counseling prospective sellers who bought in recent years at top prices that they might not make money on their homes.
“They’re not flying off the shelves,” he said. “This isn’t 2020 or 2021 where if you didn’t get in in the next four minutes, you didn’t get the house.”
Last month, homes spent a median of 66 days on the market, according to Realtor.com, five days longer than in February 2024. Median listing prices have also inched down about 1% to $412,000.
Different regions, different markets
Buyers’ power varies widely by location. These days, many of the biggest buyer's markets are in coastal Florida, where condo owners, in particular, have been struggling with rising insurance costs and hit with higher fees and assessments to bring their buildings up to code in the aftermath of the 2021 Surfside condo collapse.
Cape Coral, Miami and Fort Lauderdale each had more than 10 months of available supply in January, according to Redfin. That metric measures how long it would take for all listed homes to sell, assuming typical monthly transaction volumes. Five or six months is typically considered a balanced market.
When husband and wife Michael and Maria Mancini, both 28, began searching for homes in the Orlando area this winter, they were pleasantly surprised by the extent of the options available in their budget. They toured around 15 homes, including a marathon day in January that took them to seven viewings.