Buyers Are Back in Charge as US Housing Market Cools

The bidding wars are over — at least for now.

For the first time in years, buyers are reclaiming leverage in a cooling US housing market. More than half of homes sold in May closed below their asking price, according to new figures from real estate analytics firm Cotality.

The numbers are stark. Fifty-six per cent of sales came in under list, with the typical transaction closing $45,000 below asking. It’s a shift that signals the end of pandemic-era frenzies where offers routinely soared well above advertised prices.

Cotality senior economist Daniel Boswell says the pendulum has swung. “Savvy buyers are now in a market that is primed for negotiations on price reduction, closing cost assistance, and mortgage rate buydowns,” he said.

“However, the tilt toward a buyers’ market is only a bright spot for those who have the means to make a move.”

Even with cooling conditions, affordability remains the elephant in the room.

Boswell notes today’s buyers need about $200,000 more than they would a decade ago to purchase a median-priced home. Mortgage rates are stuck around 7%, and rising insurance costs add to the strain.

Sales volumes are down 15% year-on-year, with the national median list price holding steady at $495,000.

Homes are taking longer to shift: the average property sat for 58 days in May, a week longer than last year, marking the 16th straight month of slowing turnover.

More than 1.1 million homes have lingered on the market for three consecutive months, giving buyers more choice and less urgency.

Some markets are seeing inventory surge. Toledo, Ohio, posted a 128% increase in listings compared with last year, while Savannah, Georgia, rose 108%.

Florida is split: Naples recorded the nation’s steepest price drop — down 15% — with sales plunging 29% and listings up 58%.

Meanwhile, Miami sales sank 37% but prices defied gravity, climbing 7% to a median $580,000.

Of the 25 metros where supply is swelling fastest, only Los Angeles, Lancaster (Pennsylvania) and Boise (Idaho) recorded sales growth. Elsewhere, buyers are pulling back, sometimes sharply.

Sellers, however, are reluctant to face reality. Many are still anchored to peak-era pricing and are willing to wait rather than negotiate.

“This points to sellers anchored to peak-era price expectations and willing to wait rather than negotiate,” said Realtor.com chief economist Danielle Hale.

For now, the US housing market has entered unfamiliar territory: buyers hold the cards — but only those who can afford to play.