Home Sellers Lower Prices as Buyers Gain Leverage Amid Rising Mortgage Rates

Home sellers across the United States are beginning to slash asking prices to attract buyers, a shift attributed to soaring mortgage rates and increased inventory that is giving consumers more negotiating power. Redfin data indicates that Denver leads the nation in price cuts, with almost 31 percent of active listings reducing their asking prices.

Following Denver, Indianapolis has seen price cuts on 29.9 percent of active listings, a two percentage point increase from the previous year. San Antonio ranks third, with 26.8 percent of listings cutting prices, a 0.7 percentage point increase year-over-year. Chen Zhao, head of economic research at Redfin, stated that these price drops are becoming more common as sellers recalibrate to the current market reality. However, with 30-year fixed mortgage rates consistently above seven percent, these price reductions risk being offset by higher borrowing costs.

Other markets with significant price cuts include Dallas at 26.1 percent, Austin at 26 percent, and Portland at 25.9 percent. Minneapolis, Seattle, and Fort Worth follow with 25.3 percent, 24.3 percent, and 24.2 percent of listings, respectively. Houston reported price reductions on 23.9 percent of active listings, while Boston and Jacksonville were at 23.8 percent.

Erik Leland, a real estate broker in Oregon, suggested that Redfin's data might also reflect agents' pricing strategies, such as intentionally listing below perceived value to spark bidding wars in hot markets, or listing above value and gradually reducing prices in more stable markets. He noted that in Portland, a market with a 25.9 percent price cut rate, sellers were receiving 97.7 percent of their original asking price on average between January and early October, compared to 96.9 percent in the same period of 2025, indicating a relatively flat market.

Many homeowners are hesitant to sell and give up low mortgage rates secured during previous years, which further constrains supply. In Fort Worth, where 24.2 percent of listings saw price reductions, the market is described as balanced with about four months of inventory. Shawn Buck, president of the Greater Fort Worth Association of Realtors, cautioned against interpreting price cuts as a sign of a housing downturn, noting that the median sale price in August was $332,480. He advised buyers to consider factors beyond price reductions, such as days on market and comparable sales, and to explore options like seller concessions for closing costs or rate buydowns.

Houston's market is also becoming more balanced, with 23.9 percent of listings having price reductions, a slight decrease from the previous year. Jason Lee Villarreal of Martha Turner Sotheby's International Realty emphasized the need for sellers to price accurately from the outset, as buyers are increasingly focused on the total monthly payment, including mortgage, taxes, insurance, and closing costs.

Seattle presents a more complex picture, with its headline 24.3 percent price cut figure masking a significant divergence between single-family homes and condominiums. Chris Reis of PNW Residences at Compass Real Estate noted that single-family homes are selling close to their original asking price, while condos have seen their weakest performance since early 2023. This disparity is partly due to rising HOA costs and insurance premiums for condos, as well as recent layoffs in Seattle's tech sector, which have made potential buyers more cautious about taking on large mortgages. The 30-year fixed rate's increase has added approximately $400 per month to average mortgage payments in Seattle.

Nationally, the proportion of sellers with active listings who have cut their prices reached its highest level since 2022 in the four weeks leading up to September 20. While this indicates an increase in buyer negotiation power, experts emphasize that the rising number of price cuts does not necessarily equate to a broad decline in home values. The market is undergoing a recalibration after a period where sellers held significantly more leverage.