Today’s homebuyers are contending with inflated housing prices, limited supply, and soaring borrowing costs. Rather than increasing their budgets or sacrificing their most desired home features, many are waiting patiently for market conditions to improve. In the meantime, sellers are struggling to offload their homes as demand dries up, and in a growing number of housing markets, the only option left is to lower listing prices.
Home sellers are making the most significant reductions in overpriced markets such as Austin, Texas, Phoenix, and St. Port Lucie, Fla., where prices were cut by 25.4%, 24.6%, and 23% of all listings, respectively, Realtor.com reports.
Nationally, nearly one-fifth of all homes on the market had price reductions in February, according to the most recent Realtor.com data. The number of sellers who slashed prices doubled in the last year, to more than 18% in February—up from about 9% last year.
Some of the steepest cuts have been in the Sun Belt markets, where prices rose at the fastest clip during the height of the pandemic. Now that mortgage rates are up from the mid-2% range, into the high 6% territory, many buyers simply can’t afford those higher prices.
Advertisement
Related Stories
Economics
The US Housing Market Faces Uncertainty, But There Are Signs of Recovery Ahead
There’s improvement, just don’t expect the housing market to return to pre-pandemic norms
Demographics
Despite Having Nondiscriminatory Housing Laws, LGBTQ+ Community Still Can’t Afford Homes in These Areas
In cities where LGBTQ+ people make up the largest share of the adult population, less than 10% of homes are affordable
Market Data + Trends
1.5M Housing Units Need to Be Added to Balance US Housing Market
The housing market will likely see challenges persist if inventory isn’t added to accommodate growing demand