US Housing Market Shifts Toward Buyer Advantage
The US housing market is increasingly favoring buyers, with eight cities potentially becoming buyer's markets soon. Higher mortgage rates, however, continue to impact affordability.
The U.S. housing market showed a further shift in favor of buyers during the third quarter, with approximately two-thirds of major metropolitan areas either favoring buyers or moving in that direction, according to a Realtor.com report released Monday.
While buyers gain negotiating leverage nationally and in many markets, they face challenges from rising mortgage rates. The 30-year mortgage rate is nearing a nearly three-year high of 7.4%. Danielle Hale, chief economist at Realtor.com, noted that rates above 7% limit the home price a fixed budget can purchase, making affordability a key concern.
Eight housing markets—Atlanta, Augusta, Charleston, Chattanooga, Denver, Jacksonville, Memphis, and San Antonio—are identified as potentially tipping into buyer's market territory soon. However, Jake Crimmel, a senior economist at Realtor.com, cautioned that increased buyer leverage does not automatically mean more affordable purchases. As rates climb, the same monthly budget supports a lower home price.
Nationwide, 17 out of 99 largest metro areas are currently classified as buyer's markets, up from 13 a year ago. Seller's markets have decreased to 27. The South is leaning more towards buyer favor, while the Midwest remains predominantly seller-friendly, indicating a distinct regional split rather than a uniform national trend.