Power changes hands: buyers dominate the real estate market

For the first time in more than a decade, the U.S. housing market is showing a clear sign that power has shifted hands: it is now the buyers who have the upper hand.

According to a new report from Redfin, the country recorded the largest gap ever seen between sellers and buyers in April: nearly a half-million more homes for sale, than active buyers. It's the biggest shift since 2013:

There are an estimated 1.9 million home sellers in the housing market, and an estimated 1.5 million home buyers. In other words, there are 33.7% more sellers than buyers (or 490,041 more, to be exact). At no other time in records going back to 2013 have sellers outnumbered buyers by this large a number or percentage. A year ago, sellers outnumbered buyers by just 6.5 percent, and two years ago, buyers outnumbered sellers.

With home prices soaring more than 50% in five years and mortgage rates hovering around 6.5%, millions of working families have been priced out of the market. Renting, meanwhile, remains attractive to many.

Background: from 'no homes' to 'no one can buy them'

The Biden Administration failed to foster a healthy economic environment for the middle class. High interest rates and economic uncertainty held back important decisions, such as buying a home and starting a family. Despite a few months having passed since the Trump Administration took office, consumer confidence remains weak.

Coupled with that was the historic housing shortage problem (which is now changing shape). In markets like Miami, inventory has tripled, but sales have fallen. Construction, which collapsed after the 2008 crisis, began to recover in the Trump years, but lost momentum after 2020, leaving the country ill-prepared for current demand.

Gabriel Perozo, CEO & Lead Analyst at Invest in Miami Real Estate, agrees with the report's findings and adds that what is currently happening with "is somewhat multifactorial, the main factor keeping buyers out of the market is the high cost of monthly payments on a home, driven by interest rates near 7%, a property price increase of more than 40% during the pandemic housing boom between 2020 and 2022, and a 48% increase in homeowners insurance nationally over the past five years. Sellers, faced with the need to sell, can no longer wait, regardless of new interest rates."

The return of Trump

According to Redfin, economic uncertainty affects many prospective buyers: "Tariff talks, layoffs and federal policy changes are among the other factors dampening homebuyer demand. A recent Redfin survey found that nearly 1 in 4 Americans are ruling out plans to make a major purchase because of tariffs."

However, despite the lingering uncertainty, all does not appear to be lost, during Trump's previous term, the economy was growing strongly, the job market was strong, and Americans were confident to invest in the dream of homeownership. Much more data speaks to improvements in this regard.

According to Politico, during the first few months of his new administration (March 2025), 30-year fixed rates dropped below 7%, boosting mortgage applications by +11% per week, up 31% year-over-year. During the same period, single-family home construction grew by a remarkable 11.4 % in one month, thanks to the rebound in the market.

Perozo, assures that "the Trump Administration has tried to influence the Federal Reserve's monetary policy, but without success. Where it has had an impact is in the improved efficiency of Fannie Mae and Freddie Mac, which, under government supervision, maintain liquidity and stability in the mortgage credit market, facilitating the qualification of many first-time buyers."

The hypothetical lowering of interest rates

Regarding the drop in interest rates, the CEO of Invest in Miami Real Estate, indicated that "in a hypothetical scenario where rates fall to 6% this year, many more buyers could qualify to purchase a home."

He also said that despite this, "projections from major players such as Wells Fargo anticipate rates around 6.5%. A drop to 6% seems unlikely, as the main factor that could drive such a decrease is the Federal Reserve’s policy—and it's only expected to cut its benchmark rate twice this year, provided inflation stays near 2% and the labor market doesn’t strengthen too much. In the current economic climate, no other factor appears capable of accelerating a rate cut from 7% to 6%."

For all those buyers Perozo leaves his expert recommendation: "The ideal time to buy a house is personal, it does not depend solely on the market. However, conditions for the second half of the year could be more favorable, as the Federal Reserve is considering a controlled inflation around 2% and a weaker labor market, which could lead to cuts in interbank rates. This would make interest rates more affordable toward the end of the year, possibly hovering around 6.5%."