There were 35.2%, or about 506,000, more sellers than buyers in the housing market last month, a new report from Redfin shows. June and July were the only months in records dating back to 2013 with a greater percentage of sellers to buyers at 36.3%, according to the real estate brokerage, which is a subsidiary of Rocket Cos. 

An estimated 1.44 million buyers entered the housing market in August, the fewest since at least 2013, excluding the beginning of COVID, when the housing market hit a wall.

Despite falling mortgage rates, many Americans are priced out of the housing market, as rates are still more than double their pandemic low and home prices keep climbing, although at a slower pace than in years past. But an uptick in refinancing applications among existing homeowners last week may be a sign of more activity to come.

"We haven't yet seen a big jump in homebuyer demand due to declining mortgage rates," said Chen Zhao, Redfin's head of economics research, in a press release Monday. "Buyers may show up in greater numbers if mortgage rates keep falling, which could happen if the economy continues to weaken. If the economy slows further, the Fed may cut rates more than expected, but the catch is that a slowing economy could push the U.S. into a recession."

The average 30-year-fixed mortgage rate hit its lowest level in almost a year last week at 6.26%. If mortgage rates drop below 6%, the market could see the return of some post-pandemic buyers, Redfin experts said. 

The Federal Reserve cut the federal funds rate last week, but it was already priced into mortgage rates, and markets are expecting two more 25-basis-point cuts this year, the company said. Redfin experts expect markets to remain steady until further economic data is released, like the next jobs report on Oct. 3.

Redfin's report also showed that the market is shedding sellers, with roughly 50,000 leaving the market since May. Some sellers are delisting after their house sat on the market for months with little interest, while others may have seen similar outcomes for their neighbors, Redfin said.

Regionally, Florida and Texas posted the strongest buyer's markets in the country, with Miami seeing 143% more sellers than buyers, the largest imbalance among the 50 most populated metropolitan areas in the United States. Austin, Texas, came next at 131%. 

"Housing inventory has surged in Florida, and as a result, buyers have become more selective," said John Tomlinson, a Redfin Premier real estate agent in Fort Lauderdale, Florida. "With so many options, it doesn't take much for buyers to back out of deals. Last year, if issues like faulty AC or an outdated roof came up during an inspection, buyers would say, 'OK, we'll work with it.' Now they'll just walk away."

Newark, New Jersey, was the strongest seller's market last month. Newark had 43% fewer sellers than buyers, while Denver and Las Vegas have seen the most dramatic shifts toward a buyer's market over the past year, both nearing a 50-percentage-point swing.

"There are many first-time buyers who aren't sure if they can afford to buy and are hoping mortgage rates come down further, but home prices could rise if rates fall further," said Denver Redfin Premier agent Tamara Mattox-Kabat. "Previously, a first-time buyer would look at one-bedroom condos; now they're purchasing two-bedroom units so they can get a roommate to help cover the mortgage."