In what was expected to be a robust spring homebuying season, America’s housing market has instead hit an unexpected roadblock. Despite more homes coming onto the market, buyers are increasingly hesitant to pull the trigger, creating a peculiar standoff between eager sellers and reluctant purchasers.
The Mismatch: Supply Surges While Demand Stalls
The numbers tell a compelling story. According to recent data from Zillow, sellers put more than 375,000 homes on the market in March, representing a substantial 32% increase from February and a 9% year-over-year jump. Yet buyers haven’t kept pace with this surge in listings.
“Home price growth paused and inventory swelled during what is typically one of the most competitive home shopping months of the year. That’s despite mortgage rates reaching a 2025 low in March,” noted Skylar Olsen, chief economist at Zillow. “While sellers leaned on the gas, buyers didn’t keep up.”
This imbalance has pushed overall housing inventory up 19% year-over-year to 1.15 million homes—the highest level since March 2020, when the pandemic initially froze the housing market.
Why Buyers Are Holding Back
The reluctance among buyers stems from several interconnected factors:
Affordability Concerns Persist
Despite recent dips in mortgage rates, housing affordability remains a significant hurdle. The typical mortgage payment, assuming a 20% down payment, now consumes approximately 25% of the median US household income—dangerously close to the recommended 30% ceiling for housing costs.
“There’s a growing disconnect between what sellers think they can get for their homes and the direction the market is actually moving,” explains Elijah de la Campa, senior economist at Redfin. “Tariff fears and widespread economic uncertainty are making homebuyers nervous.”
Economic Uncertainty Looms Large
A new round of tariffs introduced by the Trump administration in March has rippled through the housing market, adding approximately $9,200 to the cost of building a typical new single-family home, according to the National Association of Home Builders.
These tariffs, targeting construction materials like lumber, steel, and aluminum, have pushed up costs and sparked caution among both buyers and sellers, turning what was expected to be the strongest spring homebuying season in years into an uncertain standoff.
Overpriced Listings
Many sellers who purchased at market peaks are reluctant to accept the new reality. “Because they bought at the peak of the market, they’re overpricing their homes to try to recoup their investment,” says Alicia Grifaldo, a Houston-based Redfin Premier real estate agent. “Sellers are competing with one another, and buyers are sparse, so pricing your listing reasonably is everything right now.”
The Slowest Market in Six Years
The typical American home is now selling at its slowest pace in six years, according to Redfin data. Homes spent an average of 47 days on the market in March—nearly double the time it took in 2022. Only 27% of buyers paid above the listing price in March, the lowest March share since 2020.
Competition between buyers has declined significantly as the supply of homes hit a five-year high. The data reveals that the post-2020 heyday of multiple offers, bidding wars, and hair-trigger buyers is well and truly over.
Regional Variations
The housing slowdown isn’t uniform across the country. Among the nation’s 50 largest metro areas, Pittsburgh leads as the slowest market with homes taking 86 days to sell, while San Jose (Silicon Valley) remains the fastest at just 22 days.
Markets in Florida and Texas are particularly affected by supply imbalances, with influxes of new housing creating a disconnect between supply and demand.
Signs of a Market Correction
Sellers have already begun responding to market pressures. About 23% of listings on Zillow saw a price reduction in March—the largest share of homes with a price cut since 2018 and up from 21% the previous month.
“Buyers are no longer competing with each other. It’s sellers that need to stand out,” notes one market analyst.
What This Means for the Future
Despite the current buyer-seller mismatch, Zillow’s Market Heat Index indicates that the housing market has largely favored sellers over the past five years. The index moved from “neutral” territory to “sellers market” territory in March, the first time it’s done so since June of last year.
However, if current trends persist, we could see a significant shift in housing market dynamics. Experts suggest that sellers who don’t adjust their price expectations may face increasingly longer wait times, while buyers who remain patient might find better opportunities in the coming months.
For now, the housing market remains in an awkward standoff—plenty of homes for sale, but not enough buyers willing to commit at current prices.