Sellers eager to offload their properties in inventory-rich, buyer-friendly markets are increasingly turning to price cuts as a way to attract shoppers—but mostly at certain price ranges.
Price cuts have emerged as the go-to strategy among sellers this year in the face of slowing housing market activity due to elevated mortgage interest rates, rising inflation, and general economic uncertainty, which are keeping many would-be buyers on the sidelines.
Looking at the national picture, in September, 19.9% of all for-sale homes across the U.S. had price reductions, up 1.2 percentage points year over year.
Regionally, the South and West led the way in the price reduction category, with 21.1% and 20.9% of listings, respectively, offering discounts, according to the latest monthly housing market trends report from Realtor.com®.
The Midwest was not too far behind with 19.2%, while the inventory-scarce, in-demand Northeast offered the fewest price cuts, at just 14%, meaning that only about 1 in 7 for-sale properties in the region came with a discount.
Price ranges drive price cuts
Although price reductions continued to be a widespread selling tactic last month, Realtor.com researchers found they were particularly concentrated in the $350,000 to $500,000 price range, suggesting that sellers in the lower-cost segment of the market were especially eager to make a deal.
On the other hand, reductions were least common among luxury home sellers.
Nationwide, over 20% of listings priced below $350,000 came with a price reduction, compared to just 13.3% of listings priced above $1 million.
"This is consistent with more motivated sellers at the bottom of the housing ladder, who need to sell in order to buy their next home, compared to patient or price-anchored sellers at the top," explains Realtor.com senior economist Jake Krimmel.
The divide between affordable and high-priced homes also mirrors regional trends, with expensive Northeastern markets proving most resistant to discounts due to robust buyer demand.
For example, in Portland, OR, the metro with the second-most price cuts in the U.S. in September (20.9%), reductions were most common in the sub-$350,000 tier of the local housing market. In that segment, roughly 34% of Portland's listings came with a price cut.
Homes ranging between $500,000 and $750,000 had the second-highest share of price cuts, at about 32%, followed by properties priced between $350,000 and $500,000, at 31.7%.
On the other side of the spectrum, just 23.6% of for-sale homes with an asking price of over $1 million offered price adjustments.
Located 3,000 miles to the east, costly Hartford, CT, in September had the second-lowest share of listed homes with price cuts, at just 11%.
Unlike in Portland, where buyer demand has been soft, price cuts in sought-after, undersupplied Hartford showed little variation across price tiers. In fact, they were slightly more common at the top of the market, with 11.7% of listings between $750,000 and $1 million offering reductions.
Discounts in 7 buyer's markets
In August, Realtor.com researchers identified seven metros that fell under the category of buyer's markets based on their housing supply.
The metric used to identify those markets represents how many months it would take for all of the listed homes to be sold at the current sales price.
The higher the months of supply, the slower the market—and the more negotiating power buyers have.
The rule of thumb is that it is a buyer’s market if supply is above six months.
Based on June housing data used in the analysis, only 7 of the top 50 U.S. metros had six or more months of supply: Miami; Austin, TX; Orlando, FL; New York City; Jacksonville, FL; Tampa, FL, and Riverside, CA.
"Even in buyer's markets, price cuts tend to be least common at the top of the market, meaning that home shoppers at middle or lower price tiers seem to be gaining more leverage in such markets than those shopping at the luxury end," notes Krimmel.
However, research shows that there is no universal pattern that fits neatly across markets.
Inventory growth slows, prices flatten
September saw housing inventory nationwide increase 17% from a year ago, the 23rd consecutive month of gains, but the pace of growth has been slowing since May, according to the latest monthly report.
The number of for-sale properties remained above the 1 million threshold for the fifth month in a row.
Supply levels continued to vary widely across regions, with the South and West surpassing pre-pandemic inventory benchmarks, while the Northeast and Midwest are still suffering from a scarcity of homes.
At the metro level, Washington, DC, and Las Vegas recorded the biggest year-over-year inventory gains, at 48.7% and 40.8%, respectively, mirroring regional trends.
New listings, which are a measure of sellers putting their homes on the market, fell 1.2% from September 2024 and 1.8% from August.
The typical for-sale home spent 62 days on the market waiting for a buyer in September—a full week longer than during the same period a year ago. This marks the 18th month in a row of homes taking longer to sell on an annual basis.
Notably, all four regions saw year-over-increases in days on the market, led by the West with an additional 10 days, followed by the South with eight days. In the Midwest, the typical home waited for a buyer an extra three days, while in the Northeast, a listing saw a delay of just one day.
Among the top 50 metros, homes lingered unsold the longest in Florida’s buyer-friendly Miami and Orlando, with 16 and 14 days, respectively.
The national median list price held steady at $425,000, same as a year ago, but it dropped 3.6% in the inventory-abundant West.
Read more at Realtor.com
Related Links
Do You Know How Much Your House Is Really Worth?
The Best Time to Buy a Home Is Coming Up—Here's When to Score a Real Estate Deal
8 Things You Should Never Store Under Your Bed
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
