The U.S. housing market is experiencing its most significant downturn in buyer activity since 2013, with affordability concerns forcing many potential homebuyers to the sidelines. In July, the number of active buyers in the market fell to approximately 967,000, marking a stark contrast to the number of available homes.
This dwindling buyer pool has led to a surplus of sellers, with nearly half a million more sellers than buyers nationwide in July. This imbalance, where sellers outnumber buyers by 51.3%, grants remaining buyers more leverage to negotiate on price and other concessions. The current situation represents a shift from previous years, particularly from July 2025, when falling mortgage rates had drawn more buyers into the market.
Rising mortgage rates, which reached their highest point in a year during July, coupled with sustained high home prices, are making monthly payments increasingly difficult for many prospective homeowners. Economic uncertainty is also contributing to buyers' reluctance to enter the market.
Market Dynamics by Region
The imbalance between buyers and sellers is particularly acute in several metropolitan areas that were once considered strong seller's markets. Five specific markets—Miami, Nashville, Houston, San Antonio, and Austin—are experiencing seller supply that outpaces buyer demand by over 100%. This surge in supply in these areas is partly attributed to new home construction projects initiated during the pandemic era now coming to market.
Conversely, a few markets are still functioning as seller's markets, meaning there are more buyers than sellers. Nassau County, New York, leads this group, with 36% fewer sellers than buyers, a trend attributed to its proximity to major employment centers. Newark, New Jersey, and Providence, Rhode Island, also show fewer sellers than buyers.
These seller-dominant markets are often characterized by long-standing constraints on new home construction. Redfin data indicates that 39 out of 49 analyzed U.S. metros were classified as buyer's markets in July, underscoring the widespread challenges facing sellers in the current economic climate.