Homebuyer Shortage Forces Sellers to Cut Prices or Walk Away as Market Slump Continues

A shortage of buyers who can afford current mortgage rates is forcing many U.S. home sellers to lower asking prices, offer concessions or withdraw listings as the housing slump persists.

While the national median home listing price rose slightly in July to $439,450, according to Realtor.com, several major metro areas recorded year-over-year declines, and mounting inventory and weaker demand have given shoppers more negotiating power in parts of the country. Realtor.com’s analysis found that a buyer earning the median U.S. household income could afford a home priced at roughly $298,000 under a 20% down payment and a 30-year mortgage at a fixed rate of 6.74%, leaving seven out of 10 buyers effectively priced out of the market.

Sales of previously occupied homes are running about 1.3% below where they were through the first seven months of last year, when sales sank to their lowest level in nearly three decades. Active listings — a measure that excludes homes pending sale — rose in July for the 21st consecutive month, climbing nearly 25% from a year earlier, Realtor.com reported. That expansion in supply has been uneven across the country, with inventory climbing sharply in many Southern and Western markets, in part because of robust new construction, while Midwest and Northeast markets remain well below pre-pandemic levels.

The changing balance of supply and demand has prompted sellers in some areas to make concessions beyond price cuts. In markets where buyers have leverage, sellers are offering up-front credits to lower buyers’ mortgage rates, covering closing costs or funding repairs identified after home inspections. Low-ball offers and fewer bidding wars have become increasingly common, a shift from the competition that drove prices up by roughly 50% nationally earlier this decade.

"Even though we are seeing a substantial amount of price reductions, sometimes it’s not enough to move the home, it’s still sitting," said Annie Foushee, a Redfin agent in Denver. Several metro areas posted notable listing-price declines in July: Austin fell 4.9%, Miami 4.7%, Chicago 4.4%, Los Angeles 4.2% and Denver 4%.

Homeowners and agents described a range of responses. Doug McCormick, an 80-year-old retired business owner, listed a four-bedroom house in Evergreen, Colorado, for $1.3 million and later trimmed the price to about $1.28 million, yet the property drew no offers after roughly two months on the market and three open houses. "I keep reminding myself you only need one buyer," McCormick said.

Other sellers have accepted lower sales prices after extended marketing. Lindsay and John Olesberg listed their four-bedroom home outside Albuquerque for $835,000 in June 2024 and lowered the price multiple times over more than a year. They ultimately agreed to sell for $40,000 below their original asking price. At the same time, the Olesbergs found greater opportunity as buyers in Austin, where inventory in July was up nearly 60% compared with pre-pandemic levels; they purchased a five-bedroom house there for $735,000, about $30,000 below its initial listing price, and the seller paid $1,000 in fees.

Some sellers who can afford to wait are taking listings off the market rather than accept steep reductions. Tammy Tullis, who listed a four-bedroom home in South Miami for $2.8 million, lowered her asking price by $100,000 to stimulate interest but received offers hundreds of thousands of dollars below the asking price and removed the listing. "I want to sell, but I’m not in a rush-rush," she said.

Real estate agents and analysts point to several forces behind the slowdown. Mortgage rates jumped from historic lows beginning in 2022, cutting buyers’ purchasing power and dampening demand. New construction in fast-growing Sun Belt markets has increased choices for buyers, intensifying competition for existing-home sellers. At the same time, in the Midwest and Northeast the supply of homes for sale remains constrained — roughly 40% and 50% below pre-pandemic levels, respectively, by Realtor.com’s account — keeping pressure on prices in some regions.

Policy discussions have also factored into housing market conversations. The White House has urged the Federal Reserve to lower interest rates to help the housing market, but economists and market professionals caution that the Fed directly influences short-term rates while most mortgage rates move with the yield on the 10-year Treasury. As a result, any Fed cut would not automatically translate into lower mortgage rates. Economists generally expect the average rate on a 30-year mortgage to remain near the mid-6% range this year, which would sustain affordability challenges for many buyers.

The current mix of higher inventory in some markets, persistent affordability constraints and the prospect of sustained mortgage rates means the housing market is likely to remain uneven. In areas with rising supply and new construction, buyers have gained bargaining power; in markets where inventory is still tight, sellers retain leverage. For many homeowners hoping to move, the choice has narrowed to accepting lower offers, offering concessions or waiting for an uncertain shift in rates and demand.

As the market adjusts, national data suggest a gradual rebalancing from the seller-favored conditions seen during the pandemic boom. Whether that rebalancing accelerates will depend on mortgage-rate trends, employment and broader economic conditions that influence buyers’ ability and willingness to purchase homes.