Stubbornly high housing costs, mortgage rates and economic uncertainty have pushed the number of active U.S. homebuyers to a record low, creating an imbalance in the housing market and tilting negotiating power toward buyers.
According to a Redfin report published Monday, there were an estimated 44% more home sellers than buyers nationwide in January. This translates to an excess of more than 600,000 sellers, marking the second-largest gap between sellers and buyers since the firm began tracking the data in 2013. The largest gap was in December, which saw a 45% difference between the number of sellers and buyers.
Redfin’s analysis, which is based on a mixture of its own proprietary information and multiple listing service data, indicates the housing market is firmly in a buyer-friendly phase, with the number of sellers having eclipsed buyers since May 2024, when Redfin calculated the difference at 10%.
The growing imbalance is largely driven by a drop in buyer demand. The number of active homebuyers in the market fell 1% month over month in January and 8% on the year to an estimated 1.36 million, per Redfin data. Meanwhile, the number of active sellers stood at an approximate 1.96 million, representing a 2% increase from the prior year despite a monthly dip in January.
Redfin attributes this buyer pullback to house hunters balking at persistently high home prices and borrowing costs, as well as high levels of economic and political uncertainty.
Harsh winter storms sweeping across much of the U.S. in January also likely dampened sales activity, a finding other industry participants echoed. In response to the lackluster demand, some sellers are pulling their listings after months of inactivity, while others are holding off on listing altogether.
A deep regional divide defines the current housing landscape, according to Redfin’s analysis. Southern cities have the strongest buyer’s markets, led by Miami, driven by pandemic-era overbuilding and rising insurance costs that created a supply surplus.
Conversely, tight inventory has kept five major metros in the Northeast and Midwest — including Newark, N.J., and Milwaukee — as competitive seller’s markets experiencing price growth.
