The housing market is shifting toward buyers. They’re still not feeling it
Isaac Ketcham said he's putting his goal of homeownership on pause until prices stabilize.
(CNN) — After years of sellers holding the upper hand, the US housing market is subtly shifting in buyers’ favor. But many are still reluctant to make a move.
Nationally, there are significantly more sellers than buyers in the market. Sellers outnumbered buyers nationwide by 58% in August — the widest gap since Redfin began tracking the data in 2013.
And, at the current sales pace, the market has 4.9 months of supply, according to the National Association of Realtors. That’s the highest level in more than a decade.
It’s a change from the past five years, when a rush for housing during the pandemic helped drive intense competition at a time of limited supply. But despite the current boost in inventory, buyers have pulled back in the last few months.
Several factors may be sidelining buyers. Mortgage rates have surged since the start of the US war with Iran, inching closer to 7%, and reaching the highest level last week since President Donald Trump’s first full week in office. The increase has driven up monthly payments, and a 7% mortgage could pose a psychological barrier for some would-be buyers, further restricting demand.
Meanwhile, national home prices continue climbing, albeit at a slower pace than inflation. In August, the median existing home sales price rose 1.6% year over year — the 38th consecutive month of year-over-year price increases, according to NAR.
Isaac Ketcham moved to Grand Junction, Colorado, from Santa Fe, New Mexico, two years ago with the goal of buying a home. Although he was recently approved for a mortgage, he realized he isn’t comfortable taking on the debt and higher monthly home payments when the economy feels so uncertain.
“I went and toured several homes, went to a couple of open houses,” Ketcham said. “But there’s no rush, not at this price.”
Pending home sales, which measure the number of new homes under contract, fell 4.7% in August from last year, NAR said. And earlier this month, mortgage applications to buy homes fell 19% from a year earlier, the industry group Mortgage Bankers Association reported.
Ketcham said he has watched prices climb and worries that buying a home could stretch his budget too far. For now, he is reluctant to give up his $1,500 monthly rent.
“You kind of have to protect your wallet where you can. Food’s going up, gas is going up, health insurance is going up, everything’s going up,” he said. “How can I afford my housing to double? That’s just crazy.”
Some homeowners still ‘locked in’
Mortgage rates have remained stubbornly above 6% since the Federal Reserve began aggressively raising interest rates in 2022 to combat inflation.
For the first time since the pandemic, more homeowners now have a mortgage rate above 6% than one below 3%, according to a Redfin analysis of FHFA data.
But for some who have still hung on to lower rates, trading out their existing mortgage rate for one above 6% isn’t feasible with mounting home prices and other monthly expenses.
Trayce Potter bought her home in 2017 with a mortgage rate below 4%, expecting it to be a starter home. Nearly a decade later, she’s still there, and the 30-minute drive to her children’s school in Shaker Heights, Ohio, has become increasingly inconvenient. Now, soaring gas prices are making the commute even more expensive.
She wants to move closer to their school, but she said the math does not work.
After the Fed’s interest rate hikes a few years ago pushed mortgage rates sharply higher, homeowners with low mortgage rates were stuck in so-called “golden handcuffs,” reluctant to sell because moving would mean taking on a much higher mortgage rate.
That “lock-in” phenomenon further constrained inventory across the country, leading to higher home sales prices.
On Wednesday, the central bank raised rates again for the first time in more than three years. As a result, experts say it could take time for mortgage rates to come down significantly.
Although Potter regularly checks new home listings in Shaker Heights, she worries that moving would double or triple her $1,200 housing costs.
She has considered selling her home and going back to renting — or asking her parents to co-buy a larger home with her and split the costs.
“It’s really discouraging. Maybe I should have jumped on it earlier and taken my chances. There’s definitely some regret (with not buying sooner),” she said.
A new ballgame for real estate agents
The slowdown in buyer interest has weighed on the real estate industry.
Tours of home listings are down 3% since the start of the year, according to Redfin and ShowingTime data through September 10. At this time last year, touring activity was up 26% from the start of 2025.
Tyler Smith, a real estate agent in Cincinnati, said his area has clearly shifted into a buyer’s market: Homes are sitting longer, and some sellers are cutting prices. Highly sought-after properties in desirable school districts can still sell relatively quickly, though, he said.
The slowdown has changed the pace of Smith’s work.
“In 2022, 2023 and even 2024, you would put a home on the market and just call your day off because you’re going to get bombarded by calls and offers and emails,” Smith said. “I’ve had up to 25 offers on one house during that time, and they were going 10% to 20% over list.”
Today, Smith said marketing plays a bigger role.
“Now you’re doing price reductions, you’re doing open houses, you’re doing more external marketing and mailers,” he said. “You can’t just put it on the market now and let it go.”
Accepting the reality of higher mortgage rates
Still, home sales haven’t dropped off despite higher mortgage rates. The pace of home sales has remained largely unchanged this year compared to last year, according to NAR data through August.
Nationally, the lock-in effect has also eased somewhat, said Brad Case, chief residential economist at Homes.com. In the past few months, more homeowners appear to have accepted higher mortgage rates as the reality and are willing to list their homes, contributing to today’s elevated inventory, he said.
Existing homeowners looking to move may be less concerned about mortgage rates if rising home values have boosted their equity. Selling at a higher price gives them more money to put toward their next home, potentially reducing or eliminating their monthly mortgage costs.
These cash-rich buyers also face less competition in the market, as buyers who are more sensitive to higher rates step back.
That’s the case for Rob Eaton. For more than 20 years, the touring musician rented an apartment in Lower Manhattan but owned his vacation home in Vail, Colorado.
Now at 65, Eaton wants a larger full-time home with more space, preferably in a New York City suburb.
He listed his Vail home for $1.3 million last month. He hopes to have enough cash to put at least 50% down on his next home if the Vail home sells by next spring.
Eaton told CNN that buyer demand has been slower than he expected in Vail, but he isn’t too worried.
He’s willing to bet on lower mortgage rates in the future. Eaton said he’s considering an adjustable-rate mortgage, which typically offers a lower introductory rate before adjusting periodically with market conditions.
“I think I’m in a good position,” Eaton said. “I won’t be locked in to a 30-year mortgage.”
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