Navigating a buyer’s market as a home buyer

Written by Samantha SheltonNMLS 1647301Updated November 2026

A buyer’s market exists when the homes for sale outnumber the people shopping for them, and the U.S. has been in one for over a year. In July 2026, Redfin counted an estimated 1,462,921 home sellers against 966,752 buyers, 51.3% more sellers than buyers, a surplus of roughly 496,000 listings and the second-largest gap on record behind December 2025’s 51.8%.

That leverage is real, and it is intensely local. To convert it into money: get a full preapproval, study each listing’s price-cut history, price from the closed comparable sales, keep your contingencies, and ask for concessions like closing-cost credits or a seller-paid rate buydown.

Here’s how navigating a buyer’s market as a home buyer works. How to confirm your ZIP code is one, five strategies that turn leverage into savings, and why Michigan buyers should check local numbers first. If you’re earlier in the process, start with our Home Buying guide.

Key takeaways:

• Supply decides who has leverage: Roughly 4 to 6 months of housing inventory is the long-standing benchmark for a balanced market; below that range sellers hold the advantage, and above six months buyers do.
• The advantage is local, not national: In July 2026, 39 of the 49 major metros Redfin analyzed were buyer’s markets and six were still seller’s markets, so your submarket’s numbers matter more than the headline.
• Concessions often beat a price cut: On a conventional loan, interested parties can contribute 3% to 9% of value toward your closing costs depending on your down payment, money that cuts your cash to close immediately.

What is a buyer’s market?

A buyer’s market is a housing market in which the supply of homes for sale exceeds buyer demand, shifting negotiating power to the buyer. It shows up three ways: more inventory available, homes taking longer to sell, and a rising share of listings cutting their asking price.

The standard measure is months of inventory. How long it would take to sell every listed home at the current sales pace with no new listings added. The convention used across NAR housing research and statistics and most MLS reports treats roughly four to six months as balanced. Below four months, sellers set the terms. Above six months, buyers do.

• Months of inventory above six: Supply has outrun sales, the structural condition underneath every other signal.
• Rising days on market: When the median listing takes materially longer to go under contract than a year ago, sellers negotiate instead of waiting.
• A high share of price cuts: Isolated reductions mean one overpriced house. When a large share of active listings have cut price, the market repriced.

Redfin measures the same imbalance by counting estimated buyers against sellers: more than 10% more sellers is a buyer’s market, more than 10% fewer is a seller’s market, and anything between is balanced. The national market has been decisively buyer-friendly since mid-2025, when sellers outnumbered buyers by 35.2% in August 2025 about 506,000 more sellers, capping a summer whose widest reading came in June 2025 at 36.3%, the largest gap in records dating to 2013 at that point. Track current readings in Redfin’s housing market data center, and see what a buyer’s market is in real estate for the underlying mechanics.

What a buyer’s market actually gets you

Four things, and only one is a lower price. The rest are terms you surrendered when sellers had five offers to choose from.

• Room to negotiate price: Sellers competing against a deep pool of comparable listings accept below-asking offers far more often, especially on homes carrying prior reductions. Our guide to how to negotiate house prices covers building the number.
• Real inventory to compare: With buyer counts at record lows, you can tour a dozen homes in a price band instead of racing to the first one you can get into.
• Time to do diligence: No 24-hour deadlines and no bidding war math. Order the inspection, read it, and get a contractor bid before your contingency expires.
• Concessions back on the table: Closing-cost credits, repair credits, rate buydowns, home warranties, and flexible closing dates reappear when sellers need a deal to close.

If you shopped in 2021 or 2022, the tactics you learned, escalation clauses, waived inspections, appraisal gap coverage, were survival tools for navigating a seller’s market as a buyer. Keep the discipline of a strong competitive offer; drop the concessions you no longer have to make.

Why are there fewer buyers than sellers right now?

Demand is soft because of prices, borrowing costs and confidence, not because people stopped wanting homes. According to the National Association of REALTORS® existing-home sales report, inventory rose to 1.60 million homes in September 2026, and NAR chief economist Lawrence Yun said “higher inventory and lengthening days on market give buyers improved negotiating power.”

NAR’s agent survey, the REALTORS® Confidence Index, also shows fewer offers per home and fewer sales above list price than a year earlier, which is the room a buyer negotiates in.

Confidence is the other drag. The University of Michigan’s Surveys of Consumers reported an Index of Consumer Sentiment of 48.0 in its final October 2026 results, down 10.4% from 53.6 in October 2025. Home builders see the same hesitation: NAHB reported in October 2026 that buyer traffic at new homes had fallen to a level not seen since April 2012, leaving out the pandemic’s onset in April 2020.

One national number argues for keeping expectations grounded. The Census Bureau’s housing vacancy survey release of October 28, 2026 put the homeowner vacancy rate at 1.2% in the third quarter of 2026, virtually the same as a year earlier. The softness is in slower sales and fewer offers, not in a rising share of empty owner homes. See housing market trends for how these readings move over a cycle.

How to tell whether your area is really a buyer’s market

Pull four local numbers before assuming the national headline applies to you. In July 2026, prices in the six remaining seller’s markets rose 4.2% year over year while prices in buyer’s markets rose just 2.3%.

Run all four on your price band, not just your city. A metro can be a buyer’s market for $600,000 houses and a seller’s market for $250,000 starter homes at once, because the buyer pool is deepest where affordability is tightest. Our guide to how to navigate a cooling housing market covers reading these indicators as they move, and a good agent pulls the data for free, here’s how to choose a real estate agent.

5 strategies to turn buyer’s-market leverage into savings

Leverage does not spend itself. These five moves are where a soft market becomes a smaller loan, a lower payment, or thousands of dollars you keep at closing.

1. Price your offer from the listing’s history, not its asking price

Ask your agent for the full price history on every home you’re serious about: original list price, every reduction with its date, days on market, and whether the listing expired and relisted to reset the counter. A home 75 days in with two price cuts is telling you what the seller will accept; a well-priced new listing is telling you something different. Then anchor to closed sales, because actives show what sellers hope for and closed sales show what buyers paid. Our guide to negotiating a home purchase covers presenting that gap as evidence rather than an insult.

2. Get a full preapproval before you shop anyway

A soft market doesn’t make your financing optional, it makes it your credibility. A prequalification is an estimate based on what you told a lender; a preapproval is a decision based on what a lender verified. Understanding prequalified vs. preapproved matters more when you’re asking for concessions, because a seller weighing a below-asking offer plus a $10,000 credit is really weighing whether your file closes at all. That’s the underrated half of the importance of mortgage preapproval.

3. Ask for concessions, not just a lower price

This is a buyer’s-market move many buyers skip, because a dollar of seller concession usually helps you more than a dollar off the price. A price reduction spreads its benefit across 360 payments; a closing-cost credit lands in your pocket on settlement day.

Say you’re buying a $320,000 home in Waterford with 10% down. Negotiating the price to $310,000 shaves $9,000 off your loan and a modest amount off each payment. Asking for a $10,000 closing-cost credit instead leaves the price alone but cuts your cash to close by the full $10,000 the day you sign. At 90% loan-to-value, conventional guidelines cap interested-party contributions at 6% of the lower of the sales price or appraised value, $19,200 here, so a $10,000 ask sits well inside the limit.¹

Know the caps before you write the ask, because a concession above the limit gets cut back at underwriting:

• Conventional loans: Interested-party contributions on a primary residence or second home are capped at 3% of value above 90% LTV, 6% between 75.01% and 90% LTV, and 9% at 75% LTV or below. Investment properties are capped at 2%.
• FHA loans: HUD caps seller and other interested-party contributions at 6% of the sales price; anything above that is treated as an inducement to purchase and reduces the property’s adjusted value, and therefore your loan amount, dollar for dollar.²
• What concessions can’t do: Financing concessions cover closing costs and prepaid items. They cannot fund your down payment, reserves, or minimum required borrower contribution.
• What to ask for: Closing-cost credits, a seller-funded temporary or permanent rate buydown, repair credits after inspection, a home warranty, appliances, and a closing date built around the seller’s move.

A buydown spends that same budget on lowering your interest rate instead, changing your payment rather than your cash at the table. Which is worth more depends on your down payment and how long you’ll keep the loan, so have your loan officer price both before you name a number. See how to budget for closing costs for what a credit has to cover.

4. Keep the contingencies you would have waived

With 39 major metros favoring buyers, there is no reason to buy a house nobody has inspected. Keep the inspection, financing, and appraisal contingencies, and use the inspection actively. In a soft market a defect list is a second negotiation. Read contingencies in home offers for what each clause protects, and the home inspection checklist for buyers for what to cover. Appraisal gap coverage is another habit to retire: your lender lends against the lower of the sales price or appraised value, so promising to cover a shortfall in cash is a real expense. Let the home appraisal process do its job.

5. Use the clock the market handed you

Tour more homes than feels necessary, go back at a different hour, and get a contractor bid on the roof before your inspection period ends. Then move decisively. A slow market is not an excuse for a slow buyer, and the best-priced listing still attracts competition. Our guide to how to avoid buyer’s remorse covers the questions worth answering before you sign, and the home buying process guide maps the full sequence.

What happens if a seller credit is bigger than your closing costs?

The extra gets cut back. Fannie Mae’s Selling Guide section on interested party contributions says financing concessions must be equal to or less than the sum of the borrower’s closing costs, and any amount above that is treated as a sales concession. Sales concessions are deducted from the sales price, and the loan-to-value ratio is recalculated on the reduced figure. That matters in a buyer’s market, when a generous seller may offer more than your costs actually add up to.

Hypothetical example, not an offer. For example, a buyer agrees to a $320,000 price, borrows at 90% loan-to-value on a conventional loan, and has $7,500 in closing costs. The seller offers a $10,000 credit.

Rules: Fannie Mae Selling Guide B3-4.1-02, topic dated May 7, 2025. Dollar figures are hypothetical.

The credit sat well under the 6% cap in Fannie Mae’s table and still lost $2,500, because the cap is a ceiling, not a target. Size the ask to the closing costs on your Loan Estimate, and take anything beyond that as a lower price instead. Our guides to seller-paid closing costs and closing costs show what a credit can cover.

Which protections should stay in your contract even when sellers are eager?

Buyers are still giving protections away. NAR’s September 2026 Confidence Index found that 20% of buyers waived the inspection contingency and 18% waived the appraisal contingency, while 7% of contracts were terminated in the prior three months, up from 6% a year earlier. Four federal protections are worth knowing before you sign:

• Lead paint in older homes: For housing built before 1978, the EPA’s real estate disclosure rule requires the seller to give you the lead hazard pamphlet and any known records, and to provide a 10-day period for a paint inspection or risk assessment. The parties can lengthen or shorten that period in writing, and buyers may waive it; a soft market gives you room to keep it.
• The federal inspection notice: Congress directed HUD in 12 U.S.C. 1701x-1 to publish form HUD 92564-CN, “For Your Protection: Get a Home Inspection,” to tell buyers about the availability and importance of an independent home inspection. Our guide to home inspection waivers weighs what you give up by skipping one.
• Three business days with the Closing Disclosure: The CFPB explains that your lender must give you the five-page Closing Disclosure at least three business days before you close, time to compare final costs with your Loan Estimate and confirm the seller credit you negotiated is on it.
• The right not to sign: The CFPB says you don’t have to sign anything at closing unless you’re satisfied with the terms, but walking away without a contract right, such as your financing contingency, can cost you the deposit you paid the seller.

Are new-construction homes a stronger buyer’s market than resales?

By the supply measure, yes. The Census Bureau and HUD reported 476,000 new houses for sale at the end of September 2026, a supply of 8.4 months at the current sales rate, past the six-month line this guide uses for a buyer’s market. The median new-home price was $400,400, 3.9% below September 2025’s $416,800, and the average was $472,800.

Builders are discounting openly. In the NAHB Housing Market Index for October 2026, 43% of builders cut prices, the highest share NAHB recorded during the 2020 to 2026 period, the average cut held at 6% for a seventh straight month, and 65% used sales incentives. Builder confidence fell to 29, a reading not seen since June 2012. NAHB’s regional readings put the Midwest’s three-month average at 40, above the Northeast’s 38, the South’s 30 and the West’s 26.

Price an incentive before you compare it with a price cut. Under Fannie Mae’s interested party contribution rules, a temporary or permanent rate buydown funded by an interested party, a builder included, counts toward the same caps listed above. Fannie Mae’s temporary buydown rules limit the rate reduction to 3% and the yearly increase to 1%, and the lender must qualify you at the note rate, not the bought-down rate. See new home construction, how rate buydowns work, and home inspections for new construction.

Mistakes that hand your leverage back

• Treating national data as local: The strongest buyer’s markets in July 2026 were Miami at 154% more sellers than buyers, Nashville at 151%, and Houston at 130%. If your metro isn’t on that list, your leverage is smaller than the headline implies.
• Over-negotiating a fair price: A lowball on a correctly priced listing 10 days into its life buys a rejection and a seller who won’t re-engage. Save the aggressive number for the listing whose history supports it.
• Skipping the inspection to look easy: Waiving inspection is a seller’s-market concession, and a few hundred dollars of inspection routinely finds five figures of deferred maintenance.
• Ignoring what rates do to the payment: Buyer counts fell 2.5% between June and July 2026 as mortgage rates hit a one-year high. The same move that widens your leverage can shrink your budget.

Tactics for every market condition live in our Buying Strategies & Situations hub, including the playbook for winning a house in a seller’s market if your submarket turns out to be one.

How do you keep your earnest money and closing funds away from wire fraud?

A slower market can mean longer contract periods and more emails about deposits and credits, and each one is a chance for a fake wiring instruction. Deposits and closing funds both move by wire, and a fake email from a title company looks like a real one.

The CFPB’s closing scam guidance lays out the steps: write down your agent’s, title company’s and loan officer’s names and phone numbers early; confirm wiring instructions, including the account name and number, in person or at a number you agreed on before; never follow instructions in an email; and never email financial information. If money goes to the wrong account, call your bank at once, ask for a wire recall, and file a complaint with the FBI’s Internet Crime Complaint Center. Our home closing process guide shows when each payment is due.

What Michigan buyers should know

Michigan is one of the places where the national headline can mislead you. According to the FHFA House Price Index, the East North Central division, Michigan, Illinois, Indiana, Ohio, and Wisconsin, posted the strongest annual house-price gain of any census division at 4.4% from the first quarter of 2025 to the first quarter of 2026, against 1.7% nationally. That is not what a deep buyer’s market looks like.

• Supply is still tight: Metro Detroit brokerages tracking Realcomp MLS data put months of supply at 2.9 months in June 2026, below the 4 to 6 month balanced range, even with active listings at a five-year high of about 25,900, up 12.6% year over year.
• Michigan metros sit mid-pack: No Michigan metro appeared among the six seller’s markets Redfin identified in July 2026, and none appeared among the strongest buyer’s markets either. Much of the state still reads closer to a seller’s market than national numbers suggest.
• Leverage here is listing-specific: Your negotiating room in Waterford, Livonia, or Grand Rapids comes from one home’s days on market and price cuts, not a statewide condition you can assume.
• Winter is Michigan’s buyer’s season: Listing activity thins from November through February, and a home that has sat through a Michigan winter belongs to a motivated seller.

What Michigan rules matter when you negotiate in a soft market?

Two state rules shape a Michigan negotiation however many homes are for sale: when the seller’s disclosure has to arrive and what the property tax bill becomes after you buy.

• Get the disclosure before you sign: Michigan’s Seller Disclosure Act, MCL 565.954, has the seller deliver the disclosure statement before a binding purchase agreement. With fewer buyers competing, you can ask to read it before you write the offer and price what it reveals into your number, rather than relying on the right to end the agreement if the disclosure arrives late. Our guide to handling seller disclosures covers what to read for.
• The tax bill after you buy: In Michigan, a home’s taxable value is capped while one owner holds it. The year after it sells, that cap comes off and taxable value resets to the state equalized value, which is half of the assessor’s estimate of market value, not automatically half of what you paid. Michigan Treasury’s uncapping page confirms the uncapping happens in the calendar year after the transfer. A negotiated discount does not make the seller’s current bill yours. As Samantha Shelton puts it, “Don’t build your budget around somebody else’s tax bill.” Run the address through the Michigan property tax calculator before you set a price.

FAQ: Buying in a buyer’s market

Here are answers to common questions about buying in a buyer’s market.

How do I know if my area is in a buyer’s market?

Check three local metrics: months of inventory, where above six months signals a buyer’s market and under four still favors sellers; median days on market, which should be rising and longer than the seasonal norm; and the share of listings with price cuts. Your agent can pull all three from the MLS. National headlines matter far less than your ZIP code’s numbers, see what a balanced housing market looks like for the middle case.

How much below asking price can I offer in a buyer’s market?

It depends on the listing’s history and local comparables, not a fixed percentage. A home sitting 60+ days with prior price cuts can support a materially lower offer; a well-priced new listing may not. Study recent sold prices against list prices, then let the data set your number. A reasonable price with clean terms usually beats an aggressive lowball, and a stronger earnest money deposit makes a below-asking offer read as serious.

What concessions can I ask a seller for in a buyer’s market?

Common asks include closing-cost credits, funds for a temporary or permanent mortgage rate buydown, repair credits after inspection, a home warranty, included appliances, and a flexible closing date. In slower markets sellers frequently agree to several to get a deal done. Concessions can beat an equivalent price cut because they reduce the cash you need at closing, our guide to preparing for a home closing shows where that cash goes.

Is a buyer’s market a good time to buy a house?

It’s typically a more favorable environment for buyers than a balanced or seller’s market: more choices, more negotiating room, and less pressure to waive protections. But “good time” still depends on your finances, stable income, manageable debt, and savings for the down payment and closing costs. If those boxes are checked, a buyer’s market lets you buy carefully, keep contingencies, and often negotiate real savings. Start with preparing to buy.

What happens to a seller-paid rate buydown if you sell or refinance early?

Any money left in the account is not lost. Fannie Mae’s temporary buydown rules say unused funds go toward the payoff, or back to the borrower or lender as the written buydown agreement specifies, if the loan is paid off early; if a buyer assumes the loan, the funds can keep lowering payments. The same rules say you still owe the full note payment if the buydown funds are not available.

Can I get my earnest money back if an FHA or VA appraisal comes in low?

Usually, yes. HUD’s amendatory clause says an FHA buyer is not obligated to complete the purchase or forfeit earnest money unless given a written appraised value of at least the contract price. VA’s escape clause, from 38 CFR 36.4303(k)(4), does the same when the price exceeds VA’s reasonable value. Either way you keep the option to proceed, and the loan is limited by the lower value.

Will asking for a seller credit raise the price of the house?

It can. The CFPB notes that a seller who grants a closing cost credit will usually require a higher price to cover it, so judge an offer by price minus credit, not by the credit alone. Ask your agent to write the price and the credit as separate lines so you can compare counteroffers side by side.

The bottom line on buying in a buyer’s market

A buyer’s market means supply exceeds demand, roughly six or more months of inventory by the traditional benchmark, and the national market has been in one since mid-2025, with 51.3% more sellers than buyers in July 2026 and 39 of 49 major metros favoring buyers. Spend that leverage deliberately: verify it locally, price from the closed comps, keep every contingency, and ask for concessions, which on a conventional loan can run 3% to 9% of value toward closing costs. In Michigan, expect a tighter market than the headlines describe and negotiate listing by listing.

If you’re ready to buy while the market favors you, talk to Align Lending. We’ll shop your scenario across our lender network, price seller-paid buydown options side by side, and help you decide what to ask the seller for. Call 248-506-5727 or start online.

Footnotes:

1. Example figures are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your loan amount, cash to close, allowable concessions, and payment depend on your application, the property, the appraisal, and market conditions. Return to text.

2. Align Lending is not acting on behalf of or at the direction of FHA or HUD. FHA interested-party contribution and inducement-to-purchase requirements are set by HUD and are subject to change. Return to text.

Sources: buyer and seller counts, the July 2026 and August 2025 gaps, the June 2025 and December 2025 peaks, metro market counts and definitions, and buyer’s- versus seller’s-market price growth, Redfin (Buyers vs. Sellers). Metro Detroit months of supply and active-listing counts, Realcomp MLS data as reported by Metro Detroit brokerages, June 2026. Months-of-inventory benchmarks, National Association of REALTORS® housing statistics convention. Interested-party contribution limits and permitted uses of financing concessions, Fannie Mae Selling Guide B3-4.1-02. FHA 6% contribution limit and inducement-to-purchase treatment, U.S. Department of Housing and Urban Development. East North Central house-price change, Federal Housing Finance Agency House Price Index. Census division composition, U.S. Census Bureau.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Purchase agreement terms, seller concession language, and contingency provisions should be reviewed by a licensed real estate professional or attorney in your state. Market data reflects the periods stated and changes continuously. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.

Related resources

20-minute read

How to create a competitive offer on a house in a seller’s market

Learn how to create a competitive offer on a house, from preapproval and pricing to contingencies and appraisal gap coverage, and win in a hot market.

Read more

20-minute read

Advantages of buying a fixer-upper: 7 key benefits (and the tradeoffs)

Discover the advantages of buying a fixer-upper, from lower prices and less competition to renovation loans that roll repair costs into your mortgage.

Read more

20-minute read

Guide to Negotiating a Home Purchase

Strategies for negotiating a home purchase, from inspection findings and seller concessions to offers that win without overpaying.

Read more