Housing Market Slump Forces Sellers Cut Prices Amid Buyers Shortage/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ As mortgage rates remain high and economic uncertainty looms, U.S. home sellers face increasing pressure to drop prices or withdraw listings altogether. Buyer demand has slumped, particularly in the South and West, where inventory has surged due to new construction. While some buyers now find better deals, the national housing market remains deeply sluggish.
Housing Market Pressure: Quick Looks
- Buyer demand continues to slump across the U.S. housing market
- Sellers now offering price cuts, closing costs, and repair credits
- Mortgage rates remain above 6.7%, limiting buyer affordability
- National median listing price in July hit $439,450
- 7 in 10 Americans priced out based on median income
- Inventory is up, but sales are still lagging
- Texas, Florida, and other southern states see large inventory jumps
- Midwest and Northeast markets remain understocked
- Price drops seen in major metros like Miami, Denver, Chicago
- Fed may cut rates, but mortgage impact remains uncertain
Deep Look
U.S. Home Sellers Forced to Slash Prices Amid Prolonged Slump in Buyer Demand
After years of dominance, U.S. home sellers are losing leverage fast. Once boosted by rising home values and fierce competition, many are now contending with reluctant buyers, rising mortgage costs, and increased housing inventory. The result: falling asking prices, concessions to buyers, and listings sitting on the market for months.
A Shift in the Market
From 2020 through early 2022, historically low mortgage rates and limited housing supply allowed sellers to command top dollar. That’s no longer the case. Now, as the average 30-year mortgage hovers near 6.74%, and uncertainty clouds the economic outlook, many buyers are either walking away or bargaining hard.
Realtor.com data reveals that the national median home listing price in July 2025 reached $439,450. But that figure masks growing regional disparities. In places like Miami, Austin, and Denver, prices have actually dropped significantly compared to the previous year. Buyers there are wielding new leverage — and many sellers are feeling it.
Buyers Push Back
The financial strain is real. According to Realtor.com’s affordability analysis, a household earning the U.S. median income can only afford a $298,000 home — a figure well below the median listing price. With 70% of buyers priced out, many homes linger unsold.
In fact, active home listings have risen for 21 consecutive months. July’s inventory was nearly 25% higher than the same time in 2024. And while new homes are helping balance supply and demand, they’re also increasing competition for existing home sellers.
Sellers Reluctantly Lower Prices
Some sellers, like Doug McCormick in Colorado, have already reduced prices without attracting serious offers. McCormick originally listed his 4-bedroom, 4.5-bath home at $1.3 million — later reducing it to $1.28 million. After two months and multiple open houses, he’s still without a buyer and now considering renting instead.
Similarly, in Miami, seller Tammy Tullis cut her home’s $2.8 million asking price by $100,000 — only to receive offers that were up to half a million dollars below that. Tullis eventually pulled the listing, opting to wait for better market conditions.
Metro Markets See Steep Declines
Realtor.com reports that cities across the country are seeing notable drops in listing prices:
- Austin: Down 4.9%
- Miami: Down 4.7%
- Chicago: Down 4.4%
- Los Angeles: Down 4.2%
- Denver: Down 4%
This softening is especially apparent in the South and West, where new home construction is outpacing demand. Meanwhile, in the Northeast and Midwest, inventory remains below pre-pandemic levels — keeping those regional markets more competitive for sellers.
Dual Role Dilemma: Buying While Selling
Some Americans are caught on both sides of the slump. Take Lindsay and John Olesberg, who listed their New Mexico home for $835,000 in 2024. After multiple failed deals and price reductions, they sold for $40,000 under asking. But when buying in Austin, they had the upper hand — scoring a $735,000 home for $30,000 under list, plus $1,000 in seller-covered fees.
“It was clear the buyer’s market helped us in Austin, even if it hurt us back home,” said Lindsay.
Sellers Walk Away
Faced with lukewarm demand and low-ball offers, many sellers are simply pulling their homes off the market. This includes affluent homeowners who don’t feel pressure to sell immediately. In some cases, they’re waiting for mortgage rates to drop or opting to rent their properties in the interim.
Will Rates Drop Soon?
The Trump administration is urging the Federal Reserve to cut interest rates, citing potential benefits to the housing market. But even if short-term rates fall, mortgage rates — which follow the 10-year Treasury yield — might not immediately decline.
Most economists expect mortgage rates to remain near the mid-6% range through the rest of the year. While lower rates would improve affordability for buyers, they could also flood the market with new demand — limiting how much sellers feel the need to discount.
Until then, many sellers will need to adjust their expectations. Homes are staying on the market longer, and fewer buyers are willing — or able — to meet high asking prices. For now, it’s a waiting game.
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