Home Sellers Outnumber Buyers by 63% as Mortgage Rates Top 7.4%

A record imbalance, four months running

In September, sellers in the U.S. housing market outnumbered buyers by more than at any time in Redfin's data. The brokerage estimates there were 62.6% more sellers than buyers that month, the largest gap in records that start in 2013. It was also the fourth monthly record in a row, up from 56.9% in August.41 The raw counts explain the gap. Redfin estimates 928,892 active buyers, the fewest in its records and the fifth straight monthly decline. It counts 1,510,784 sellers, the most since March 2020.42

One detail matters for how the story gets told. Redfin's own headline compares today's market to the period after the 2008 crash. But the series only goes back to 2013, so the defensible claim is a record within that 13-year window.42 The buyer figure is also an estimate. Redfin builds it from its own data on how long buyers take to go from a first tour to a closing, combined with MLS counts of active listings and pending sales. The seller figure is simply the number of active listings.41 Several outlets added the same warning: these numbers describe how much negotiating power each side has. They are not a headcount of every shopper or a count of finished sales.4648

Redfin labels 41 of the 50 most populous metros as buyer's markets, the most it has ever recorded.43 Miami had the biggest surplus, with 158.9% more sellers than buyers. Nashville (152.3%) and Houston (134.6%) came next. All 13 metros with at least twice as many sellers as buyers are in the Sun Belt.44 Only five metros favor sellers: Nassau County, NY; Montgomery County, PA; Newark; Milwaukee; and San Francisco. Redfin ties most of them to years of limited construction, and ties San Francisco to wealth from the AI boom.42

Demand is the problem, not supply

The most telling quote came from Redfin senior economist Asad Khan. He called this a buyer's market "born out of caution, not strength." Many would-be buyers, he said, have been priced out or scared off by economic uncertainty.41 The National Association of Realtors (NAR) said much the same in its September existing-home sales report. Chief economist Lawrence Yun said supply is no longer the main issue and that demand is what is shrinking.13

Redfin's other September indicators back this up. Seasonally adjusted pending home sales fell 4% from August, the steepest monthly drop in more than three years. They were down 8.6% from a year earlier and at their lowest level since spring 2014, leaving aside the April 2020 lockdown.44 Contract cancellations were the highest share of deals since early 2020. Redfin says buyers with more options feel freer to walk away over inspection problems or payment worries.44 Listings are piling up mostly because homes are not selling, not because more owners are listing. New listings rose just 0.3% month over month, while active inventory rose 1.2%.44

Home sales: a small gain that overstates the trend

NAR reported that existing-home sales rose 1.5% in September to a seasonally adjusted annual pace of 3.99 million, which was 2.2% lower than a year earlier.11 The monthly gain is mostly an artifact. NAR cut its August figure to 3.93 million, and Yun himself said the September increase should be discounted for that reason.13 August and September were the two slowest months of 2026. Yun said the market is "scraping to the bottom" of its recent sales range.13

The timing points to more weakness ahead. September closings mostly came from contracts signed in August, before the sharpest rate increases. Yun said fourth-quarter closings could fall noticeably if rates stay well above 7%.13 For scale, sales reached 6.89 million in 2021 and 4.06 million in both 2024 and 2025.19 NAR's inventory count rose to 1.60 million homes, a 4.8-month supply and the highest level since November 2019.13 Lockbox traffic, which tracks showings, fell 3% from a year earlier. Only 8% of agents expect more buyers in the next three months.13

Home prices: still rising, but split by region

The price data is the one place where the reports seem to disagree. NAR's median existing-home price was $417,500, up 1.3% from a year earlier. That was the 39th straight annual gain and the highest September median on record.1113 Redfin's national median sale price was $393,895, also up 1.3%.12 National prices, in other words, have not fallen despite the buyer's-market label.

The disagreement mostly goes away at the local level. In August, home prices in Redfin's five seller's markets rose an average of 6.4% from a year earlier. Across all buyer's markets, the gain was 1%.41 NAR's regional numbers show the same split. The Northeast median rose 4.7% to $523,600, the South gained only 0.2%, and the West fell 0.3%.11 Our reading is that national prices are holding up partly because of a mix of tight Northeast and coastal markets. Meanwhile, the Sun Belt, where most of the excess listings are, is close to flat. Bill McBride of CalculatedRisk expects that with rates near 7.5%, sales will slow and prices will come under pressure.27 New homes are already cheaper than existing ones in some cases. The median new-home price has dropped below the existing-home median as builders lean on rate buydowns and other incentives.19

Mortgage rates: forecasts are rising

The main reason buyers are pulling back is the cost of borrowing. Freddie Mac's average 30-year fixed rate was 7.40% on October 15, the same as the week before. It was 6.95% four weeks earlier and 6.30% a year ago.36 The Mortgage Bankers Association's (MBA) contract rate, which runs higher, hit 7.50% for the week ending October 9. That is the highest since November 2023.23

Forecasts have been rising to match. Fannie Mae's October outlook expects a 7.4% average in the fourth quarter and 7.5% in every quarter of 2027.32 The MBA is a little lower, at 7.3% by year-end and 7.1% by late 2027.32 Some consumer guides still carry older forecasts near 6.8% for year-end, made before the late-September jump. Those figures are now out of date.3138 The wider backdrop is not helping. September consumer inflation sped up to 3.7%.26 The Federal Reserve's most recent move was a quarter-point increase, not a cut.31 Rate-watchers polled by Bankrate were divided, but 57% expected rates to rise further in the following week.33

Mortgage applications: buyers turn to ARMs

Weekly application data shows the damage as it happens. The MBA's composite index fell 4.2% for the week ending October 2 and another 2.7% the following week.2123 Purchase applications were 16% below a year earlier, and refinance volume was 56% lower.27 FHA purchase applications fell the most in early October, a sign that first-time and lower-down-payment buyers are hit hardest.21 More borrowers are choosing adjustable-rate mortgages (ARMs). Their share of applications rose to 10.5%, the highest since October 2025, as buyers try to lower their first payments.23 Xactus's credit-pull index stopped falling but was still about 20% below a year earlier.23

Construction: builders pull back slowly

Homebuilders are adjusting slowly and unevenly. Total housing starts ran at an annual pace of 1.275 million in August, down 2.6% from July. Permits fell 2.7% to 1.394 million.6 Single-family starts rose 7.6% to 918,000, while starts of larger apartment buildings dropped sharply.9 TD Economics noted that permits fell for both single-family and multifamily homes. It expects starts to keep easing as financing costs bite.3 Completions fell 27.1% from a year earlier. Builder sentiment slipped to 32 in September.710

The overlap with Redfin's map matters. The South accounted for about 53% of starts in 2025.10 Redfin says strong homebuilding has added to the oversupply in Sun Belt metros, and that insurance and HOA costs also weigh on buyers in Florida.44 The September construction report comes out October 20.2

The verdict

All of these reports point to a market that is stuck, not to a crash. Buyers can choose from more homes than they have in years, but there are fewer of them, and higher rates are thinning the field further. Most forecasters now expect rates above 7% to last into 2027, so the near-term direction looks like this. Sales stay weak. Price gains shrink, with Sun Belt prices likely flat or falling. And sellers who need to move keep giving ground on price, closing costs, and buydowns.44 The seller surplus will probably narrow only when rates fall, not when listings dry up.