More homes are reaching the market, but fewer buyers are signing contracts, creating a window for loan originators to negotiate financing help from sellers before affordability meaningfully improves.
Seasonally adjusted new listings rose 0.4% during the four weeks ending Aug. 23, reaching their highest level since April, according to a new Redfin report. Active listings increased 0.5% to their highest level since May.
Pending sales moved in the opposite direction. They fell 1.1% from the previous four-week period and 3.1% from a year earlier, reaching their lowest level since February.
That widening gap between available homes and signed contracts gives qualified buyers more room to negotiate. For originators, it creates an opening to structure seller-paid mortgage-rate buydowns, closing-cost assistance, repair credits, and other concessions that can reduce the upfront or monthly cost of a purchase.
The market is becoming more negotiable before it becomes substantially more affordable.
The median U.S. home-sale price increased 1.9% year over year to $400,649, while the median monthly mortgage payment reached $2,600 at an average rate of 6.65%, according to Redfin. Purchase mortgage applications were down 5% from a year earlier during the week ending Aug. 21.
That leaves many prospective buyers unable or unwilling to move forward even when they have more homes from which to choose.
“House hunters should consider homes that have been listed for several weeks,” said Chen Zhao, Redfin’s head of economics research.
Zhao said sellers of lingering listings may be more receptive to below-asking offers, mortgage-rate buydowns, repair requests, or other concessions.
More Leverage, Not Necessarily A National Buyer’s Market
The changing balance does not mean every U.S. housing market has decisively shifted in favor of buyers.
Nationally, the available supply of homes increased to 3.8 months from 3.7 months a year earlier. Redfin considers four to five months of supply a balanced market, with a lower figure generally indicating conditions that still favor sellers.
Other measurements also show that the shift is incomplete. Homes spent a median of 44 days on the market, unchanged from a year earlier, while 26.3% sold above list price, up from roughly 25%. The average home sold for 98.8% of its asking price, compared with 98.6% a year earlier.
But 20.8% of active listings had received a price reduction, giving originators a potential starting point for conversations about seller assistance. A buyer who cannot make the numbers work at the advertised price and note rate may have other options if the seller is willing to redirect some proceeds toward closing costs or a temporary or permanent rate buydown.
Seller assistance is already becoming more common. In May, a record 46.2% of U.S. home sales included a seller concession, up from 43.1% a year earlier. Those concessions ranged from repair credits and closing-cost contributions to mortgage-rate buydowns, with the greatest leverage concentrated in markets where inventory had risen fastest.
Some sellers were cutting prices and offering concessions on the same transaction, indicating that affordability relief is increasingly being negotiated at the deal level rather than delivered through a broad decline in mortgage rates or home prices.
The Opportunity Varies By Market
The national averages conceal substantial differences between metropolitan areas.
Pending sales fell most sharply from a year earlier in Seattle, down 18.1%, followed by Houston at 15.3%, Denver at 13.2%, San Diego at 12.9%, and Atlanta at 10.6%.
New listings, meanwhile, increased 13.3% in San Jose, 9% in Boston, and 8.9% in both St. Louis and Seattle. Seattle’s combination of rising listings and sharply declining pending sales suggests a particularly pronounced shift in negotiating power.
Price movements were equally divided. Median sale prices fell 4.6% in Seattle, 3.7% in Austin, Texas, 1.7% in both Fort Worth, Texas, and San Jose, California, and 1.5% in Houston.
At the other end of the market, prices increased 10.2% in West Palm Beach, Florida, 8.9% in Newark, New Jersey, and 7.9% in Pittsburgh. Pending sales also increased in West Palm Beach, Milwaukee, San Francisco, St. Louis, and Cincinnati.
Those differences make local market knowledge critical. An originator in Seattle or Houston may have considerable room to discuss concessions with a seller, while a borrower in a more competitive market may have far less leverage.
The same split is visible in the new-home market. New-home sales fell 10.5% in July as available supply climbed to 9.6 months, leaving builders increasingly dependent on price reductions, rate buydowns, and other incentives. Existing-home sellers are now facing some of the same pressure, although the national resale market remains tighter than the market for newly constructed homes.
For loan originators, more inventory alone will not rebuild the purchase pipeline. The immediate opportunity lies in identifying listings where seller motivation can be converted into financing relief, then showing buyers how the complete deal changes when concessions, price reductions, and rate buydowns are considered together.
