Cooling Housing Market Tilts Power Toward Buyers as Competition Eases

After years of fierce bidding wars and record-high prices, the balance of power in the U.S. housing market is finally shifting. A new analysis from Redfin shows that competition among homebuyers dropped sharply in September, giving buyers more leverage than they’ve had in nearly six years.

Three of the most closely watched measures of market competition homes selling above list price, sale-to-list ratios, and speed of sales all fell to their lowest September levels since 2019. That cooling trend, paired with growing inventory and a modest drop in mortgage rates, is helping reshape buyer and seller behavior across the country.

Key Indicators of a Cooling Market

According to Redfin’s report:

• Share of homes selling above list price: Just 25.3% of homes sold for more than their final asking price last month, down from 28.5% a year earlier.
• Average sale-to-list price ratio: Homes sold for an average of 98.6% of their list price, compared to 99.1% in September 2024. That means the typical home sold for 1.4% below its asking price a clear signal that sellers are losing some of their pandemic-era pricing power.
• Share of homes selling within two weeks: About 32.8% of listings went under contract within 14 days, down from 34.9% a year earlier.

Homes are also sitting on the market longer. The typical property under contract in September took 50 days to sell, the slowest September pace since 2016.

Buyers Reclaim Leverage

This slower pace has created new opportunities for buyers who were previously sidelined by soaring prices and rapid sales cycles.

“Buyers are walking back into the market with more confidence,” said Roze Swartz, a Redfin Premier agent in Houston. “But their expectations are high and not always realistic. Many still remember being preapproved for a 3% mortgage rate during the pandemic and shopping for $450,000 homes. Now, with higher rates, property taxes, and insurance costs, their budgets are closer to $325,000. They’re still chasing the homes they wanted two years ago, even though the math has changed.”

Sellers, meanwhile, are learning to adapt. “If you’re not pricing aggressively, you’re invisible,” Swartz added. “Listing high and waiting for offers just doesn’t work right now. It’s better to start low and build momentum than to sit on the market for months and end up cutting your price later.”

Regional Shifts: Midwest Gains, Texas Slows

The Redfin report highlights a divergent market across the country. While some regions are regaining traction, others are clearly cooling off:

• Biggest price gains: Midwest metros led the way, with Milwaukee (+9.1%), Detroit (+7.9%), and Cleveland (+7.4%) seeing the strongest year-over-year appreciation.
• Largest price declines: Texas metros posted notable drops, including Dallas (-2.7%), Austin (-2.3%), and Houston (-1.5%).
• Pending sales growth: San Francisco (+17.1%), Riverside, CA (+11.6%), and West Palm Beach, FL (+11%) led the country in contract activity.
• Pending sales declines: Houston (-11.7%), Denver (-8.4%), and San Antonio (-6.3%) saw the sharpest pullbacks.
• Closed sales: Providence (+17.1%), San Francisco (+15.6%), and West Palm Beach (+14.6%) topped the list for closed sales increases, while Detroit (-8.6%), Orlando (-6.5%), and Nassau County, NY (-2.6%) trailed.

More Inventory, More Choices

Across much of the country, inventory levels have improved, offering buyers more breathing room. Active listings were up 8% year-over-year in September, even after dipping 0.6% month-over-month to 1.96 million homes the lowest total since February but still higher than a year ago.

Markets like Washington, D.C. (+21.1%), Las Vegas (+20.7%), and Seattle (+16.6%) saw the largest increases in active listings, while only San Francisco (-7.7%) and San Jose (-6%) recorded declines.

With more homes to choose from, buyers are moving cautiously. Sellers who fail to meet buyer expectations are increasingly withdrawing their listings or renting their homes out temporarily, according to Redfin agents.

Prices Edge Higher, But Bargaining Returns

Despite the softening in demand, prices remain elevated. The median U.S. home price rose 1.7% year-over-year to $435,545 in September the biggest annual gain in six months and the highest on record for that month.

However, price growth is slowing compared to earlier in the year, when supply constraints drove sharper increases. Buyers are once again negotiating, and in many markets, sellers are accepting offers below asking price to get deals done.

Mortgage Rates: A Quiet Tailwind

One factor helping to stabilize the market is the gradual easing of mortgage rates. The average 30-year fixed rate hovered around 6.35% in September, its lowest level in a year. While still higher than pandemic-era lows, these rates have sparked renewed interest from buyers who had previously paused their searches.

“The drop in rates has been enough to bring some buyers back, but not enough to cause a surge,” said one Redfin economist. “Most are waiting for rates to fall further before making big moves. The market feels like it’s in a holding pattern.”

Indeed, pending home sales a leading indicator of future closings fell 2.4% year-over-year in September, the steepest decline since February. Month-over-month, they dipped another 1% on a seasonally adjusted basis, suggesting that while activity is improving, many buyers remain hesitant.

A Market Reset in Real Time

The data paints a picture of a market undergoing a controlled cooldown rather than a sharp downturn. Sales are rising modestly, inventory is improving, and price growth is stabilizing all signs of a housing sector finding its equilibrium after several overheated years.

“Buyers finally have options again, and sellers are having to work harder to stand out,” Swartz noted. “This isn’t the frenzied market of 2021 or 2022—it’s a negotiation market now.”

Looking ahead, analysts expect this buyer-friendly phase to continue into early 2026, especially if mortgage rates drift lower and economic conditions remain stable. But as one Redfin report put it:

“For the first time in years, the question isn’t how fast prices will rise it’s how much power buyers will reclaim before the next cycle begins.” For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.