Homebuyers Gain the Upper Hand as Active Listings Surge—With the Biggest Increases in These 3 Cities

While surging mortgage rates have diminished buying power for many this fall, the well-prepared and savvy home shoppers can still find attractive opportunities out there—if they know where to look and how to use the shifting market conditions to their advantage.

September saw the growth of for-sale inventory dramatically accelerate compared to a year ago, topping 1.16 million listings, according to the latest Realtor.com® monthly housing market trends report.

At the local level, three metros stand out for experiencing the steepest increases in inventory: Minneapolis, Seattle, and Buffalo, NY.

Crucially, inventory gains were recorded in all four regions and in 43 of the 50 largest U.S. metros, up from 37 the month before. Additionally, homes are sitting on the market longer than last year in 27 metros.

"Even with surging rates, the laws of supply still apply," explains Realtor.com senior economist Jake Krimmel. "More inventory means buyers still in the market gain more leverage."

In other words, this inventory glut offers prepared buyers who have done their homework a distinct edge. With more homes to choose from and extra time to make a move, buyers gain significant negotiating power with sellers.

Another factor to keep in mind, according to Krimmel, is that because of the high-rate environment and a a seasonal slowdown, buyers who are resilient enough to stay in the market will face less competition.

An additional benefit of sticking it out instead of calling it quits for shoppers this fall is the prospect of potential savings, considering that sellers have shown their willingness to take a haircut on prices to boost demand.

In September, median asking prices were down and the share of listings with price reductions reached its highest level since October 2022, even as delistings flatlined year over year. Taken together, these shifts suggest that sellers eager to move are prepared to offer concessions rather than pull their homes off the market.

Minneapolis leads in inventory growth

Active listings in Minneapolis surged 31.2% year over year, the most of any major metro, followed by Seattle, where inventory grew 28.5% over the same period, with Buffalo in third place with 28%.

Michael Orbino, managing broker at Team Foster Builder + Developer Services at Compass, says that in Seattle, a mix of market dynamics is fueling the surge in inventory, including job mobility, landlords listing previously held rental properties for sale, and sellers who previously failed to find buyers relisting with adjusted prices and updated interiors.

"Lots of unmotivated or ill-prepared sellers add to inventory counts. They have deep equity and/or low interest rates with low carrying costs, so they have an attitude that they really don't need to sell and can wait," Orbino tells Realtor.com.

Similarly to other markets, the broker says that some homes in Seattle spark bidding wars while others languish for six months or longer, depending on their condition.

Notably, the reason for the booming inventory is typically that homes are sitting unsold longer, not that fresh options are inundating the market. In fact, new listings are down 7.4% annually in Seattle and 1.1% in Minneapolis. However, they're up 7.6% in Buffalo.

Sellers slash prices to drive demand

The bad news for sellers is that there is no sufficient demand to absorb the expanding supply. For example, in Seattle, pending sales are down more than 12% from a year ago.

Looking to secure a closing, sellers are increasingly turning to incentives to sweeten the deal.

In the nation's most inventory-rich markets, price cuts were up in September, with a quarter of active listings in Seattle boasting a discount, followed by 23% in Minneapolis, and nearly 13% in Buffalo. 

For perspective, the national price cut share reached 20.8% last month, the highest level since October 2022.

Even without cuts, in Seattle, Minneapolis, and Buffalo, median asking prices are down 2.4%, 4.1%, and 2.7%, respectively, from a year ago.

Buyers take the reins

For buyers, these metrics offer some welcome breathing room.

"They get to make sure they are not making a rushed decision for most properties, which is helpful to have peace of mind making such a key decision," says Orbino.

At the same time, having so much supply to choose from means that shoppers have a better chance of getting the features on their must-have list, such as a yard, a garage, or an additional bathroom.

"Most of our buyers in this market will settle on two, three houses they like and then pursue a negotiation on their favorite," points out the Seattle broker. "If that seller is not willing to engage, then they pivot to their second best and so on. When sellers have to compete, then buyers win."

Homebuyers determined to succeed in the face of economic uncertainty can rely on strategies recently reported on by Realtor.com. Those operating on timelines between three and 12 months can rate-proof their budgets against sudden spikes in mortgage rates by pricing in potential increases based on historical data.

Shoppers with less time to spend on planning can beat the 7%-plus mortgage rate by improving their credit scores, increasing their down payments, or most easily, shopping around for a top-notch lender.