The U.S. housing market is experiencing a shift, with rising inventory and more price reductions signaling a growing buyer’s advantage. Nearly 20% of homes listed for sale in September saw price cuts, a marked change from the past few years when sellers had the upper hand. This change, according to real estate experts, is indicative of a market adjusting to higher mortgage rates and slowing demand. But what does this shift mean for both buyers and sellers, and how long will these trends last?
While the market remains complex, the increase in price cuts points to the growing affordability pressures faced by many sellers. In September, homes priced between $350,000 and $500,000 saw the most significant markdowns. Yet, despite these adjustments, the luxury market remains largely insulated from price reductions, suggesting the financial flexibility of high-end sellers in a market under pressure.
A Changing Market: Price Cuts Are More Common Than Ever
According to Realtor.com, almost 20% of homes listed for sale in September experienced price reductions, a slight increase from the previous year. The most significant cuts were seen in the mid-tier market, with homes priced between $350,000 and $500,000, where 21.6% had their prices lowered. Luxury properties, priced over $1 million, saw far fewer reductions, with only 13.3% of these homes adjusting their prices.
Experts note that these price reductions reflect the balance shift in the market. Jake Krimmel, senior economist at Realtor.com, explained that high-end sellers often have more flexibility, either due to financial resources or equity, which allows them to hold firm on pricing. In contrast, sellers of mid-tier homes typically need to sell quickly to buy another property, making them more willing to lower prices.
With the surge in price cuts, there’s a growing sense of movement in what had been a seller-dominated market. “Price reductions have become one of the clearest signals of change,” Krimmel said, adding that this trend is a direct result of rising inventory and buyer pressure.
Regional Variations: Price Cuts Hit the South and West Hardest
Not all regions are experiencing price cuts equally. While 14% of homes in the Northeast had price reductions, both the South and West saw much higher percentages, with around 21% of listings in these areas lowering prices. In major metro areas, cities like Denver, Portland, and Indianapolis saw even more dramatic reductions, with price cuts reaching nearly 30% in some instances.
This regional divergence points to broader market dynamics. The South and West have seen some softening due to affordability concerns, while the Northeast and Midwest have remained more resilient. However, rising inventory across the board means that sellers everywhere are having to reset expectations to stay competitive, with longer time on the market and more price reductions becoming the norm.
