Buyers have an advantage this spring — but will they show up? 

Potential buyers continue to gain negotiating power, aided in part by declining home prices in many major U.S. metros, but economic uncertainty and affordability are still preventing many of them from jumping into the market.

A new Redfin report found that among 49 metro areas analyzed in March, 38 — or nearly 78% — were buyers markets, up from 29 a year earlier. In five of those markets, sellers outnumbered buyers by more than 2-to-1.

That shift corresponds with an increase in price drops across the U.S. In a separate report using Zillow data, ResiClub estimates that 89 of the nation's 300 largest housing markets saw home prices fall year-over-year in March, up from 60 markets a year prior. 

While an increase over last spring, the number of markets with price drops has declined since December, when 106 markets experienced falling prices. ResiClub expects the number to keep trending down in the next few months since inventory growth has slowed.

Buyers near record low: The number of buyers in March was estimated to be 1.39 million, just shy of the all-time low of 1.38 million at the start of the pandemic in April 2020, according to Redfin, which has tracked this data for 13 years.

But even though sellers outnumber buyers by a wide margin, they have pulled back as well. Redfin estimates there were 1.99 million sellers on the market in March, the lowest level in a year.

Florida, Texas see biggest price drops: Some of the strongest buyers markets are the ones with significant price drops heading into the spring market. Austin had more than twice as many sellers than buyers in March, according to Redfin, and also posted a year-over-year home price decline of nearly 6%, ResiClub found. 

That dip put the Texas city in fourth place among the 89 metros with falling prices. The most significant price drops were in Florida, with Punta Gorda, Cape Coral-Fort Myers and North Port-Sarasota-Bradenton seeing declines between 6.3% and 10.25%. 

Sellers still have an advantage in 5 markets: A handful of metros favor sellers, mostly in the Northeast. Markets where buyers outnumber sellers include Newark, New Jersey, with 30.4% fewer sellers than buyers, followed by Nassau County, New York; Montgomery County, Pennsylvania; Milwaukee, Wisconsin; and New Brunswick, New Jersey.

Spring market 'a toss-up': With the homebuying season off to a slow start, it remains unclear whether there will be a late spring rally. After surging in March, mortgage interest rates have fallen in recent weeks and remained relatively stable at around 6.3% despite the volatility around energy prices, the Iran war and inflation. Rates remain elevated compared to February, when they briefly dipped below 6%.

"For now, the spring housing market is still a bit of a toss-up. New listings increased in March, signaling sellers are gearing up for the spring," Lisa Sturtevant, chief economist at Bright MLS, said last week. 

"However, we're not sure if the higher inventory will be enough to entice buyers into the market. Higher rates continue to erode buyer purchasing power and uncertainty continues to give prospective buyers pause."

Other factors, including "high property taxes, rising insurance costs and fears about job security are making homebuyers very selective," Barb Cooper, a Redfin Premier real estate agent in Austin, said in the Redfin report. "The buyers who are in the market want turnkey homes in every sense, and they can afford to wait without compromising because we have tons of inventory."