Economy 5 min read By Bethany Hadley
US Housing Market Tilts to Buyers as Record Share of Sellers Cut Prices
A record share of US home sellers cut asking prices in late September, Redfin data shows, but mortgage rates above 7% are limiting who can actually take advantage of the shift.
More than one in five US home sellers with active listings reduced their asking price in the four weeks ending 20 September, according to data from Redfin, marking the highest share for this time of year since the property brokerage began tracking the metric in 2022. At 21.1%, the figure signals a strong buyer's market nationally, though the benefit is unevenly distributed as borrowing costs remain elevated.
Among the 50 most populous US metro areas, Denver recorded the highest share of active listings with a price cut at 30.9%, followed by Indianapolis at 29.9%. Three Texas metros completed the top five: San Antonio at 26.8%, Dallas at 26.6% and Austin at 26.1%. At the other end of the scale, San Francisco had the lowest share at 9.6%, with Newark at 12.2%, Chicago at 13.3%, New York at 13.6% and Miami at 13.7%. San Francisco is one of just five seller's markets among the major metros Redfin tracks, a position attributed in part to highly paid artificial intelligence workers directing salaries, signing bonuses and equity into local real estate.
The national share of sellers cutting prices is only slightly above last year's 19.8%, but Redfin cautions that the headline figure does not capture the full picture. Some would-be sellers are holding off on listing, while others are withdrawing their homes rather than accept a lower offer. A further group is pricing realistically from the outset, reducing the need for later markdowns. In August, US home sellers outnumbered buyers by 58%, according to Redfin estimates, the widest gap in records dating back to 2013.
Not everyone accepts the buyer's market label. Lisa Sturtevant, chief economist at Bright MLS, which covers six states and Washington, D.C., questioned whether the description fits the Mid-Atlantic region. «I would not necessarily call it a 'buyer's market' as the Redfin headline suggests. Inventory is still very tight and prices remain near record highs in many local markets,» she said. She acknowledged that more sellers in the region are reducing asking prices, but noted that many buyers are already at the limits of what they can afford.
Affordability constraints are being compounded by mortgage costs. The average rate on a 30-year fixed mortgage climbed to 7.28% as of 1 October, according to Freddie Mac, its highest level since November 2023 and up from 6.34% a year earlier. Higher rates translate into larger monthly payments, which can make it harder for buyers to qualify for a loan if those payments are too high relative to income. Sellers also face the risk of accepting an offer only for the buyer's financing to fall through.
That dynamic may strengthen the case for all-cash buyers. Michael Reher, an associate professor of finance at UC San Diego's Rady School of Management, said the best time and place to buy all-cash is during periods of uncertainty and illiquidity in the housing market. His research found that all-cash buyers pay about 10% less on average than those relying on a mortgage, because sellers will accept less to avoid the risk that a buyer's financing fails. Rising price cuts on their own strengthen the case for paying cash among buyers who have the funds, Reher said, though he added that buyers should assess conditions in their target market before deciding whether to borrow or pay cash.
The divergence between national and local conditions means the balance of power remains difficult to characterise uniformly. Price cuts are becoming more common, but tight inventory and near-record prices in some markets continue to limit the relief available to buyers. For those who can afford to proceed, the market offers more room to negotiate than in recent years. For those dependent on mortgages at current rates, the question is less about bargaining power and more about budget capacity.
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