The housing market is becoming more balanced, but at a great cost to buyers, who are footing the bill of high monthly mortgage payments, and sellers, whose stronghold on the market has slipped away as mortgage rates doubled this year. This is according to a new report from Redfin, a technology-powered real estate brokerage.

There were 2.9 months of home supply during the four weeks ending September 11, up from one month from a year ago and the highest level since June 2020.

The rapid climb in months of supply shows how quickly sellers lost their grip on the market as mortgage rates shot up to 6%, making homes unaffordable to many buyers. Potential sellers are reluctant to list their homes in this environment, which is why inventory is falling. But it’s hard to say with conviction that buyers have a true upper hand, either.

“Home buyers have more power than they’ve had since the ‘before times,’ ” said Taylor Marr, Redfin’s deputy chief economist. “Unfortunately, it’s increasingly hard for buyers to make use of their newfound power thanks to the affordability pressures of rising mortgage rates and a dearth of homes being listed for sale.”

Marr said a true buyer’s market would have more homes for sale than there are buyers, with a wide variety of homes for sale by style, price and location so when a buyer finds the home that matches their preferences they face little competition and can offer under asking price with healthy inspection and financing contingencies in place. “Today’s average buyer is paying less than the list price, but they continue to struggle to find a home that meets their criteria and budget,” he explained.

Leading indicators of home buying activity

• For the week ending September 15, 30-year mortgage rates rose to 6.02%, their highest level since November 2008.
• Fewer people searched for “homes for sale” on Google. Searches during the week ending September 10 were down 26% from a year earlier.
• The seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—was down 11% year over year.
• Touring activity as of September 11 was down 14% from the start of the year, compared to an 8% increase at the same time last year, according to home tour technology company ShowingTime.
• Mortgage purchase applications were up 0.2% week over week, seasonally adjusted, and were down 29% from a year earlier during the week ending September 9.

Key housing market takeaways for 400-plus metro areas

• The median home sale price was $371,748, up 7% year over year.
• Home sale prices in San Francisco fell 8% year over year, the biggest decline since July 2022. Neighboring Oakland, California, where prices fell 1.6%, San Jose, California, where prices dipped 0.2% and New Orleans, where prices were down 6%, rounded out the only four metro areas that saw year-over-year median-sale-price declines.
• The median asking price of newly listed homes increased 8% year over year to $380,725. The monthly mortgage payment on the median asking price home was $2,385 at the current 6.02% mortgage rate, up 42% from $1,674 a year earlier, when mortgage rates were 2.86%. That’s down from the peak of $2,460 reached during the four weeks ending June 19.
• Pending home sales were down 19% year over year, the largest decline since May 2020. New listings of homes for sale were down 19% from a year earlier, also the largest decline since May 2020. Active listings (the number of homes listed for sale at any point during the period) fell 1.7% from the prior four-week period. On a year-over-year basis, they rose 3%.
• Months of supply—a measure of the balance between supply and demand, calculated by dividing the number of active listings by closed sales—increased to 2.9 months, the highest level since July 2020. While 34% of homes that went under contract had an accepted offer within the first two weeks on the market, little changed from the prior four-week period but down from 41% a year earlier.
• 23% of homes that went under contract had an accepted offer within one week of hitting the market, little changed from the prior four-week period but down from 28% a year earlier. Homes that sold were on the market for a median of 28 days, up from 22 days a year earlier and the record low of 17 days set in May and early June.
• 34% of homes sold above list price, down from 48% a year earlier. On average, 7.2% of homes for sale each week had a price drop, up from 3.8% a year earlier. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, fell to 99.5% from 101.1% a year earlier.