Spring Homebuying Season Kicks Off With Price Cuts and Market Shifts
The spring homebuying season is officially here, and there's promising news for buyers: home prices are dropping as properties linger on the market and mortgage rates remain high.
In February, nearly 17% of homes had price reductions, the highest share for that month since 2016, according to Realtor.com. This trend suggests buyers may find better deals in the coming months.
“This high share of price reductions could signal further price softening as sellers adjust their expectations,” says Danielle Hale, chief economist at Realtor.com.
Sellers Adjust as Homes Sit Longer on the Market
Sellers have been forced to lower prices as homes stay on the market for an average of 66 days, five days longer than last year. Meanwhile, mortgage rates remain elevated at 6.74%, though experts note they are trending downward.
Additionally, housing inventory is at its highest level since August 2019, while home sales remain sluggish, according to Kenon Chen, executive VP at Clear Capital.
“If mortgage rates continue to drop, more buyers may re-enter the market, reducing the need for price cuts,” Chen told Fortune.
Some Sellers Are Taking Homes Off the Market
Rather than dropping prices, some sellers are choosing to pull their homes from the market. In December, home delistings surged 64% year-over-year to 73,000, according to CoreLogic data cited by The Wall Street Journal.
What to Expect This Spring
The current median U.S. home price is $412,000, but prices in high-growth states are much higher. For instance:
- Massachusetts: Median home price $722,000+
- Washington State: Nearly $600,000
Still, price cuts are happening nationwide, especially in markets where homes are sitting longer.
- Colorado real estate investor Brett Johnson says he’s seeing 3% to 5% price reductions in Denver and Boulder.
- Evan Luchaco, a home loan specialist in Portland, has seen $5,000 to $10,000 cuts, with some homes dropping as much as $150,000 if they’ve been listed for six months or more.
Will Home Prices Keep Dropping?
Experts agree that price cuts will continue, but not across the board.
“Well-priced homes in desirable areas still move quickly, but anything sitting too long gets discounted fast,” Johnson says.
If mortgage rates keep declining, buyer activity could increase, making price reductions less common later in the season. However, motivated sellers—such as investors offloading properties or homeowners relocating—will likely continue to make concessions.
