Homeownership is becoming slightly more affordable as the housing market slows, giving buyers more negotiating power.
The typical U.S. home is selling for 1.8% less than its asking price, according to Redfin data. This is the largest discount in nearly two years. Houses that sell are taking about 56 days to go under contract, which is the longest span in nearly five years. In addition, more than half of listings are sitting on the market for at least 60 days without going under contract, which is similar to 2023 and 2024 during the same time of year but down from the prior month when 61% of listings were on the market for at least 60 days.
Data from Zillow shows homes selling in an average of 38 days, which is slower than last year but nearly 10 days faster than pre-pandemic norms. The report from Zillow also found nearly 23% of sellers cutting their home's list price in January. Though competition varies greatly by region, most buyers in the market today have a good chance of seeing a price cut on their saved listing, Zillow said.
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Redfin and Zillow attributed the slow market to high interest rates and prices that have pushed monthly payments to near-record highs. Political and economic turmoil are adding additional uncertainty that is causing potential home-buyers to step back.
Slow demand means more sellers are open to accepting an offer under the asking price, but the larger pool of available homes are not necessarily the ones buyers want.
“The listings lingering on the market tend to be in unpopular neighborhoods or require renovation,” said Charles Wheeler, a Redfin premier agent in San Diego. “Relatively affordable, move-in ready homes close to highly rated schools are selling quickly, often with multiple offers.”
Homes in West Palm Beach, Fort Lauderdale and Miami are selling for roughly 5% less than the asking price. In Tampa and Jacksonville, typical homes are selling for about 4% less than asking, according to Redfin.
Zillow’s data shows about one-quarter of sellers cut the price of their listing last month, with Denver, Las Vegas, San Diego and Austin having the largest share of listings with a price cut. Price cuts are most common in Phoenix, where they're found on more than one-third of listings, Tampa, Jacksonville, Orlando and Dallas, said Zillow.
Homes are selling in two weeks or less in expensive coastal metros like San Jose, Boston, Seattle and Washington, D.C., and far more slowly in the South, said Zillow. New Orleans and Atlanta join Texas and Florida metros with the most relaxed pace of sales.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
