Danielle Hale Chief Economist | realtors.com
The U.S. housing market is adjusting to the Federal Reserve's recent interest rate cut in September, which lowered mortgage rates to 6.2%, the lowest since September 2023. Despite a slight increase in rates afterward, the impact of the reduction is evident as more homes enter the market, prompting sellers to lower prices.
According to Realtor.com's September Housing Market Trends Report, median home prices fell from $429,990 in August to $425,000 in September. Price reductions also increased by 0.9 percentage points compared to last year. "The percentage of homes with price reductions increased from 17.7% in September of last year to 18.6% this year," stated Ralph McLaughlin, senior economist at Realtor.com.
A rise in housing stock has led to less competition among sellers who are now offering more competitive prices due to increased supply and demand dynamics. The number of homes for sale grew by 34% year-over-year in September, while unsold homes rose by 22.9%. New listings were up by 11.9%, providing buyers with more options.
"Home price reductions signal to homebuyers that homes are not moving as quickly as sellers anticipated," said McLaughlin.
Price reductions were noted across most regions except for the South, where they decreased slightly by 0.1 percentage points. In contrast, cities like Providence, RI; Portland, OR; and Tampa, FL saw significant increases in price reduction shares.
In addition to potential savings on purchase prices, reduced-price homes might offer other financial benefits during transactions such as concessions or credits for repairs and upgrades according to McLaughlin.
For those looking for price-reduced properties, cities like Phoenix and Austin have seen notable cuts with listings showing a significant portion of their inventory experiencing price drops.
Alerts Sign-up