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Washington DC | ReNews International Desk News
The US housing market is entering a new phase in which the central challenge is increasingly not simply the availability of homes, but whether Americans can afford to buy them.
While the country is not experiencing a record flood of new property listings, the balance between buyers and sellers is shifting in many markets. Fewer prospective buyers are actively competing for homes, leaving some properties on the market longer and giving those who remain greater negotiating power.
The changing conditions represent a significant departure from the intense competition that characterized much of the housing market during and immediately after the pandemic, when limited inventory and exceptionally strong demand frequently produced bidding wars and rapid price increases.
Affordability has now emerged as one of the biggest constraints on housing demand. Home prices remain high in many parts of the country, while borrowing costs have made monthly mortgage payments considerably more difficult for households to absorb. The combination has pushed homeownership beyond the financial reach of many potential buyers, particularly first time purchasers and households with limited flexibility in their budgets.
As a result, the market can appear better supplied even without an unprecedented increase in the number of homes being listed for sale. When fewer buyers are able or willing to enter the market, existing inventory takes longer to clear, increasing the number of homes available at any given time.
That shift is strengthening the position of buyers who remain financially capable of purchasing. In markets where demand has weakened, buyers may have more room to negotiate over prices, closing costs, repairs and other terms that sellers were less willing to discuss during periods of intense competition.
For sellers, the adjustment can be more difficult. Homes that might previously have attracted several offers quickly may now require longer marketing periods, price reductions or other concessions to secure a buyer. Sellers who entered the market expecting the conditions of previous years may increasingly need to adjust their expectations.
However, the national picture remains highly uneven.
Some US housing markets continue to suffer from significant shortages of available homes, particularly in areas where construction has failed to keep pace with population growth and household formation. Limited supply in these locations can continue to support prices even when affordability is under pressure.
Other markets are moving in the opposite direction. Where inventory has increased relative to demand, sellers are competing more aggressively for a smaller pool of qualified buyers. These areas are more likely to experience longer listing periods, greater price flexibility and stronger buyer bargaining power.
The result is an increasingly divided American housing market. Instead of one nationwide trend, local supply, demand, construction activity, prices and household purchasing power are producing sharply different conditions from one region to another.
The key question for the housing sector is therefore changing. It is no longer only whether the United States has enough homes available for sale, but whether enough Americans can afford those homes.
For now, market conditions increasingly point to the same conclusion: fewer active buyers, greater negotiating power for those still shopping, and a widening gap between markets where housing remains scarce and those where sellers are competing for demand.

A sustained recovery in the US housing market will depend heavily on mortgage rates easing, according to a survey of real estate agents who say high borrowing costs are discouraging both buyers and sellers.

The Real REMAX Group’s Agent Optimism Index, which measures agents’ 12-month outlook on a scale of 0 to 100, fell to 45.8 in September from 54.3 in August. The decline reflects growing concern that mortgage rates will remain too high to bring more buyers into the market. In the firm’s monthly survey, conducted from October 1 to 9 and released on October 30, 65% of 177 agents said 30-year mortgage rates would need to fall below 6% to meaningfully stimulate buyer demand. More than one-third, or 37%, said rates would need to drop below 5.5%.

High rates are already affecting housing activity. Two-thirds of respondents said buyers were pausing or delaying their home searches. Sellers are also holding back: 39% of agents reported that prospective sellers had postponed plans to list their homes.
Some sellers are responding to the slowdown by becoming more flexible on price and terms. Thirty-five per cent of agents said they had seen sellers reduce asking prices, while 34% reported sellers offering concessions to attract buyers.

The outlook for prices is also weakening. If mortgage rates remain around 7% next year, nearly 60% of survey respondents expect home prices to fall. About 33% anticipate a decline of more than 5%.
“Higher mortgage rates are putting renewed pressure on an already challenging housing market,” Real REMAX Group Chairman and CEO Tamir Poleg said in a statement accompanying the survey. Poleg said buyers had gained more negotiating power, but affordability remained a major barrier, prompting many to delay their searches. He added that a lasting recovery in housing activity would depend substantially on meaningful mortgage rate relief.

The survey’s findings echo Goldman Sachs’ outlook for the US housing market in 2027. The firm’s economists expect existing-home sales and new-home construction to decline. They forecast 3.9 million existing-home sales next year, alongside a modest 0.8% rise in home prices.

Goldman Sachs economists Ronnie Walker and David Mericle said that many homeowners who refinanced at low rates in 2020 and 2021 now face a significant financial cost if they move while current mortgage rates remain high.