Sellers Reduce Listing Prices to Stay Competitive in High-Rate Market

by Jeff Hernandez

As we head into the 2025 home shopping season, there’s one thing on everyone’s mind—mortgage rates. They’ve stayed stubbornly high, and it’s putting pressure on buyers across the country. In response, more and more sellers are rethinking their pricing strategies to help spark interest and get their homes sold.

In fact, nearly 23% of home sellers cut their listing prices in January—the highest share for any January since 2018, according to recent data. That’s a clear sign that today’s market is shifting.

What’s Behind the Price Drops?

There are a few major factors driving this trend:

High Mortgage Rates: With rates still elevated, buyers simply don’t have as much buying power as they did in years past. Affordability is a big concern.
More Homes on the Market: Inventory is up, which means buyers have more choices—and sellers are feeling the competition.
Longer Time on the Market: Homes aren’t flying off the shelves like they used to. Many listings are sitting longer, leading sellers to consider price reductions to help move things along.

Where Are Price Cuts Happening the Most?

Some cities are seeing more price reductions than others:

Phoenix is leading the pack, with 34% of listings showing price drops.
Other hotspots include Tampa (32%), Jacksonville (31%), Orlando (29%), and Dallas (29%).
Markets like Denver, Las Vegas, San Diego, and Austin have seen the biggest year-over-year increases in price cuts.

What Does This Mean for You?

Whether you’re buying or selling, these trends are worth paying attention to:

Buyers: You’ve got more negotiating power than you’ve had in a while. More listings are coming with price reductions, which could help offset some of the sting from higher borrowing costs. But be sure to factor in those mortgage rates when budgeting.
Sellers: If you’re planning to list your home, it’s important to be realistic about pricing. Overpricing can lead to longer time on the market and eventually a price cut anyway. A competitive price from the start—and a willingness to negotiate—can help your home stand out and sell faster.

Final Thoughts

In today’s market, sellers are having to make some smart adjustments to attract buyers. With higher mortgage rates and more homes to choose from, pricing a property right is more important than ever. And for buyers, this could be a great opportunity to find a home that fits your needs—potentially at a better price.

Staying informed and flexible is key, no matter which side of the transaction you're on.

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