Home sellers outnumbered buyers by an estimated 62.6% in September, the widest gap in Redfin’s records dating to 2013. Buyers gained negotiating room, but the purchase business kept shrinking: fewer homes went under contract, and cancellations reached their highest share since the pandemic’s opening months.
The seller surplus widened from 56.9% in August, setting a record for the fourth consecutive month, according to Redfin’s buyer-and-seller report released Oct. 14.
Redfin estimated that 928,892 buyers were active nationwide in September, the fewest in its records. That was down 2.4% from August, marking a fifth consecutive monthly decline. The estimated number of sellers rose 1.2% to 1,510,784, the most since March 2020.
More listings give borrowers options and sellers a reason to negotiate. They haven’t brought buyers back in sufficient numbers to lift sales.
“This is a buyer’s market born out of caution, not strength,” said Asad Khan, a senior economist at Redfin.
Khan said high housing costs and economic uncertainty have sidelined would-be buyers, leaving those with the budget and job security to purchase with more freedom to negotiate or walk away.
Fewer Deals Reach The Starting Line
Redfin’s separate September housing report shows the decline in purchase activity.
Seasonally adjusted pending home sales fell 4% from August, the biggest monthly drop in more than three years, and declined 8.6% from a year earlier. Pending sales reached their lowest level since spring 2014, excluding the pandemic freeze in April 2020.
For the first time since September 2023, pending sales fell annually in all 50 of the most populous metro areas Redfin analyzed. Seattle had the largest decline, at 24.4%, followed by Los Angeles at 16%, San Diego at 15.8%, and Anaheim, California, at 15.5%.
Closed sales fell 1.6% from August to their lowest level since the end of 2023. Most of those transactions went under contract in July or August; September’s weaker pending sales signal fewer purchases moving toward closing.
The deals already under contract were less certain, too. Canceled purchase agreements represented 14.5% of September’s pending sales, up 0.3 percentage points from August and 1.2 points from a year earlier. Only March and April 2020 had higher cancellation shares in Redfin’s records.
Redfin attributed the elevated cancellations to buyers having more alternatives and greater latitude to leave a deal over inspection problems, payment concerns, or a change of mind.
Seller Flexibility Has Limits
Homes are accumulating partly because buyers aren’t absorbing listings quickly enough. New listings increased just 0.3% from August, while active inventory rose 1.2%.
Seller surpluses widened in 39 of the 41 markets Redfin classified as buyer’s markets. Khan said that in every metro where buyer counts fell monthly, the balance shifted further toward buyers because sellers did not retreat nearly as quickly.
Negotiations are already affecting sale prices. Some 60.5% of homes sold in September closed below their original asking price, continuing an approximately 18-month stretch in which roughly three in five sales did so. Nearly one in five active listings — 19.8% — had an asking-price reduction during the month.
But financing costs continued to work against borrowers. The average 30-year fixed rate was 6.86% in September, up from 6.67% in August and 6.35% a year earlier, according to the figures in Redfin’s housing report. Rates climbed above 7% toward the end of September.
Home-sale prices remained 1.3% higher than a year earlier, although that was the smallest annual increase since February.
Chen Zhao, Redfin’s head of economic research, said in the housing report that reduced competition gives buyers more room to negotiate prices, closing costs, and repairs, with some sellers also paying for rate buydowns.
A Wide Regional Divide
Redfin classified 41 of the 50 major metros it analyzed as buyer’s markets in September, the most in its records. Four were balanced, and five remained seller’s markets.
Miami had the largest seller surplus, at 158.9%, followed by Nashville, Tennessee, at 152.3% and Houston at 134.6%. All 13 metros with more than twice as many sellers as buyers were in the Sun Belt.
Redfin said robust homebuilding has contributed to the imbalance in those markets. In Florida, insurance and homeowners association costs are also weighing on affordability.
Several markets with substantial seller surpluses also had high cancellation shares. Jacksonville led at 19.9%, followed by Tampa at 18.8%, Las Vegas at 18.6%, San Antonio at 18.5%, and Phoenix at 18.4%.
Conditions remained tighter in Nassau County, New York; Montgomery County, Pennsylvania; Newark, New Jersey; Milwaukee; and San Francisco — the five seller’s markets.
Nassau County had 28.6% fewer sellers than buyers, the tightest balance among the metros analyzed. San Francisco had the lowest purchase-contract cancellation share, at 2.8%.
Boston and Providence, Rhode Island, remained balanced but moved toward buyers. Sellers outnumbered buyers by 7.4% in Boston, compared with roughly equal numbers in August. Providence’s 2.4% seller surplus reversed the previous month’s buyer surplus.
Redfin defines a buyer’s market as one with more than 10% more sellers than buyers, and a seller’s market as one with more than 10% fewer sellers than buyers. Markets within that range are considered balanced.
