After years of red-hot bidding wars, the housing market may be heading into a cold front — and it may cause prices to fall. But there’s a bit of a catch.

The number of US home sellers now dramatically exceeds the number of buyers, according to a new Redfin report, signaling a shift in power not seen since the real estate firm began tracking such data in 2013.

As of April, there were nearly 500,000 more homes on the market than buyers actively looking — marking the widest gap between the two groups in that span of time. 

The imbalance hints at a broader market slowdown, not because homes are becoming more affordable, but because fewer people are willing — or able — to buy. And in order to sell, homeowners may have to reduce their prices for the pool of people who are actively on the hunt.

For now, despite the cooling demand, prices continue to climb. 

The median sales price for an existing home rose 1.8% year-over-year in April to $414,000, a record for that month, according to the National Association of Realtors. That marks the 22nd straight month of annual price growth, even as affordability erodes.

Driving the slowdown are elevated mortgage rates, which are hovering just under 7%. 

Higher borrowing costs are compounding monthly payments, deterring new entrants during what is typically the busiest season for home shopping. 

At the same time, economic jitters — ranging from a volatile stock market to global trade concerns — are making consumers more cautious.

“Based upon previous spring selling seasons, I have noticed a lot of listings are sitting longer on the marketplace (this year),” Karen Pohl, a real estate agent in Las Vegas, told CNN.

“I think there are a lot of sellers who still have really ambitious pricing for their homes, and it may be time to get realistic with their pricing in order to be competitive in the marketplace.” Pohl added that more sellers have begun offering concessions or cutting prices.

The surge in listings is the largest since March 2020, while the buyer pool is at its lowest point since the onset of the pandemic, with the exception of April 2020 when lockdowns froze activity. 

Redfin estimates buyer activity based on pending sales and the typical timeline from initial home tour to purchase.

A recent survey from Bank of America shows that 75% of potential buyers are waiting for both home prices and interest rates to decline before making a move.

Still, Redfin doesn’t expect the most major price correction. 

“Generally, the ratio of sellers to buyers seems to be a predictor for home price growth, but with a lag of about three to six months,” Chen Zhao, the company’s head of economics research, told CNN. 

“The reason we think home prices will fall by 1% and not something larger is because it’s actually very hard for home prices to fall, unless sellers have to sell,” she said. “Sellers can always decide they don’t like the prices that are currently in the market and decide to stay in their home.”