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.
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 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.
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.
The current median U.S. home price is $412,000, but prices in high-growth states are much higher. For instance:
Still, price cuts are happening nationwide, especially in markets where homes are sitting longer.
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.
Subscribe to our newsletter for the latest financial insights and news.