As the spring homebuying season gains momentum, mortgage lenders may find more borrowers testing the waters — and more opportunities to tailor strategies based on local dynamics. According to new data from Zillow, a nationwide surge in housing inventory and improved affordability have created some of the most favorable conditions for buyers in years. Yet in key markets, sellers continue to dominate, driving competition and price gains.
In February, the U.S. housing market saw more than 1 million active listings — the highest level for that month since before the pandemic. Paired with stabilizing home values and lower mortgage rates, this shift is opening the door for more borrowers to re-enter the market, particularly first-time homebuyers.
“While affordability remains incredibly challenging, the housing market is improving for buyers nationally,” said Zillow® Senior Economist Orphe Divounguy. “Some of the strongest buyers markets are in the Southeast, where builders have been able to keep up with demand. Sellers are still in the driver’s seat in the Northeast and in Northern California, where buyers are competing for the few homes that are available.”
Zillow’s spring market heat index identifies the five metro areas where buyers are most empowered — and five where sellers retain the upper hand. For lenders, understanding these contrasts can help drive more targeted origination efforts, risk assessment, and borrower engagement.
Top 5 Markets Favoring Buyers
Miami, Fla.
Homes are sitting on the market for a median of 60 days, nearly triple the national pace. With 24.2% of listings seeing price cuts, Miami borrowers are better positioned to negotiate, extending the timeline to lock in rates and explore financing options.
New Orleans, La.
Inventory is up 42% from pre-pandemic levels and 11.4% year-over-year, offering borrowers a wide selection and more time to secure financing. Homes spend 58 days on the market, allowing lenders to engage with borrowers earlier in their decision-making process.
Jacksonville, Fla.
A strong rise in listings (+26.3% YoY) combined with 28.8% of homes seeing price reductions makes Jacksonville a key opportunity for affordable lending products. Borrowers may qualify for more favorable loan terms as competition eases.
Tampa, Fla.
Inventory growth of 19.8% and a 3.6% dip in home values provide a cushion for entry-level buyers. With 31.9% of listings marked down, this market could generate demand for FHA and first-time buyer loan products.
Memphis, Tenn.
A prime affordability market, Memphis offers a median monthly mortgage of just $1,228 (20% down, 30-year fixed), undercutting the local rent average of $1,418. Homes go pending in 29 days, offering lenders time to guide borrowers through pre-approval and underwriting.
Top 5 Markets Favoring Sellers
Buffalo, N.Y.
Buffalo leads Zillow’s list as its “hottest market of 2025,” driven by job growth and strong first-time buyer demand. Homes sell in 12 days or less, and 56% go for above asking price. With home values up 5% YoY, loan-to-value ratios may remain favorable despite quick turnarounds.
San Jose, Calif.
With home values up 7.6% YoY and 57.1% of listings selling over asking, San Jose remains a high-stakes, high-value lending environment. Homes go pending in just 9 days, putting pressure on lenders for fast closings and rate lock execution.
San Francisco, Calif.
Despite a 32.5% jump in inventory, demand remains strong, with 44.4% of homes selling above list. Lenders should prepare for competitive borrower behavior and rising appraisal values in a dynamic Bay Area market.
Hartford, Conn.
The fastest-moving market on the list: Homes go pending in just seven days amid a 71% drop in inventory from pre-pandemic levels. With home values up 5.6% YoY, lenders may find limited supply driving urgency among qualified borrowers.
Boston, Mass.
With 40.4% of homes selling above asking and median time to pending at eight days, Boston continues to be a high-demand metro. Home values are appreciating at 4.2% YoY, double the national average, fueling consistent refinance and purchase activity.
