"Housing Market 2024: Sellers Still Hold the Power as Buyers Await Relief"

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The 2024 spring housing season is in full swing, with one pressing question on everyone’s mind: is it a buyer’s or seller’s market? Mortgage rates for a standard 30-year fixed-rate mortgage are still hovering near 7.5%, but despite the pressure of these high rates, the U.S. economy continues to grow stronger than expected. This has left both sellers and buyers wondering who holds the upper hand in this dynamic housing market.

A National Market Still Favoring Sellers

On a national level, the answer tilts in favor of sellers. Inventory levels remain roughly 40% below pre-pandemic norms, fueling a 6.6% increase in median home prices year-over-year as of February 2024, according to Redfin . The housing market continues to grapple with a chronic shortage of homes, leaving buyers with fewer choices, while sellers benefit from increased demand for what limited properties are available.

Economic factors like low unemployment, low mortgage delinquency rates, and a relatively stable economy have helped buffer the housing market. Yet, the low supply of existing homes, coupled with stubbornly high mortgage rates, has led to affordability issues that keep many potential buyers on the sidelines.

Key Market Indicators Show a Stagnant Market

The U.S. News Housing Market Index (HMI) has consistently struggled to rise above 60.0 throughout 2023 and early 2024, indicating a stagnant market. As of mid-April, the index stood at 63.9 . The index provides insights into factors such as job growth, housing supply, and inventory levels, which all play critical roles in determining the health of the housing market.

Even as buyers slowly come to terms with elevated mortgage rates, without a significant increase in inventory, the national housing market remains locked. Sellers, especially in high-demand areas, continue to benefit from strong pricing, while potential buyers are left waiting for better conditions.

Shifts in Local Markets: Hot Spots and Cooler Zones

Though the national market largely favors sellers, not all local markets follow this trend. Areas experiencing strong job growth and ample housing supply—like San Diego, San Jose, and Seattle—continue to outperform with price increases. Meanwhile, cities like San Antonio, Greeley, Colorado, and North Port, Florida, have seen price declines, signaling more favorable conditions for buyers .

In terms of home sales, Redfin reported a slight uptick of 1.2% over the 12-month period ending February 2024, indicating a slight edge for buyers in some regions. However, cooler markets such as Boise, Idaho, and Portland, Oregon, favor sellers, with declining sales activity resulting in higher demand for fewer available homes .

Inventory Still Tied to Market Imbalance

While national housing inventory rose marginally by 0.2% year-over-year in February 2024, certain regions have seen drastic shifts. In Cape Coral, Florida, for example, inventory surged by 79%, creating a more buyer-friendly market. Conversely, cities like Boise City, Raleigh, and Durham in North Carolina experienced significant inventory declines, putting additional pressure on buyers in those areas .

Days on Market and Housing Supply Metrics

The amount of time a home spends on the market offers another key insight. In February 2024, the typical home for sale in the U.S. lingered on the market for 48 days—a significant jump from the median of 26 days during the same month in 2023. Still, homes in competitive markets like Seattle, San Jose, and San Francisco are selling much faster, often within just 12 days .

A balanced housing market usually has between five and seven months of supply. As of early 2024, the national market sits at just 2.7 months, strongly favoring sellers .

A Glimpse into Future Supply

Builders are slowly catching up with demand. Single-family home permits have risen sharply, up 35.1% year-over-year in February. Though this uptick helps alleviate some pressure, the market is still far from reaching pre-pandemic levels of balance .