U.S. home buyers are entering late summer with more properties to choose from and signs of weakening demand, creating a residential market in which negotiations may become increasingly important.
Redfin reported that the number of new listings rose 0.4% during the four weeks ending August 23, reaching the highest level since April. Total homes for sale increased 0.5% over the same period, reaching the highest level since May.
At the same time, pending home sales declined 1.1% week over week and reached their lowest level in six months.
The combination suggests that housing supply is expanding modestly while some potential buyers remain on the sidelines.
Mortgage costs are one reason.
The weekly average mortgage rate was approximately 6.65%, according to the latest Redfin analysis. At that rate, the median monthly mortgage payment was approximately $2,600.
Although the rate was slightly below a recent 6.69% peak, it remained close to the highest level seen in more than a year.
For households financing a home purchase, even small changes in mortgage rates can affect monthly payments and purchasing power.
The median U.S. home-sale price was approximately $400,649 during the period covered by the report, representing a 1.9% increase from the previous year.
The relatively modest annual price growth is important because it indicates that national home prices are no longer increasing at the rapid rates recorded during earlier periods of the housing cycle.
Nevertheless, affordability remains difficult for many households because prices remain high while borrowing costs are elevated.
The changing balance between supply and demand is creating different conditions across metropolitan areas.
Redfin identified Miami, Nashville and several Texas markets as areas where buyers may have increased negotiating leverage. In those markets, additional inventory and comparatively softer demand can make sellers more receptive to offers below the original asking price or requests for concessions.
Other markets remain more competitive.
The national figures show that 26.3% of homes sold above their list prices during the four-week period, demonstrating that strong buyer competition continues to exist in parts of the country.
That disparity is one of the defining characteristics of the current housing market.
A buyer searching in one metropolitan area may encounter price reductions and sellers willing to negotiate, while another buyer in a supply-constrained neighborhood may still face multiple offers.
Local inventory therefore remains more important than any single national statistic.
Seasonality is another factor.
Late summer can become an important transition period because some sellers have been on the market for several weeks and may reassess their expectations before the fall selling season develops.
A separate analysis reported that late August and early September can offer particularly favorable opportunities for buyers seeking discounts in a number of U.S. metropolitan areas.
That does not mean every home becomes cheaper during the period.
Rather, the seasonal shift can create opportunities when a property has remained unsold and the seller has greater incentive to complete a transaction.
For sellers, the changing environment creates pressure to price accurately.
Redfin advised sellers not to base today's asking prices primarily on what nearby properties achieved a year or two earlier, because current mortgage costs and buyer demand may be substantially different.
Properties that are priced correctly from the beginning may attract serious buyers faster than those that enter the market above current buyer expectations.
The market's 44-day median time on market further demonstrates that many properties are no longer moving immediately.
For buyers, longer marketing periods can provide more opportunities to compare homes and negotiate.
For sellers, they can signal the importance of understanding competing inventory.
The residential market is therefore becoming more balanced in some locations even though national affordability remains challenging.
Higher mortgage rates continue to limit purchasing power, but increased inventory and slower demand are giving active buyers more choices.
The result is a housing market that increasingly rewards careful comparison and realistic pricing.
Late August may provide a seasonal opportunity for some purchasers, but the strongest negotiating positions will continue to depend on individual metropolitan areas, neighborhoods and properties.
Best Houses Contributor
Covers residential real estate and the agents behind it, from listings and design to the deals that close.
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