Desperate home sellers slash prices at near record pace as buyers stay away

Although mortgage rates have eased since the summer, buyers aren’t returning to the market as many home sellers had hoped.

As a result, roughly one in six sellers cut their asking prices in August.

New data from Redfin shows that 16.7% of U.S. home sellers lowered their asking price in August, up from 15.9% a year earlier and the highest share for any August since recordkeeping began in 2012.

It also marks the third-highest monthly level on record.

A high share of price reductions typically signals a cooling market, as sellers adjust expectations when homes fail to sell at initial listing prices.

The August figure underscores weaker buyer demand amid affordability pressures from elevated prices and still-high mortgage rates, at a time when broader economic signals remain mixed.

Redfin data also shows that the typical discount has widened to 3.8% below the initial list price, the largest gap since before the pandemic.

The housing data provider said the market has shifted out of seller’s territory, with sellers outnumbering buyers by more than 500,000 in August — the second-largest imbalance in over a decade.

“Price drops can signal weakness to buyers and lead to further cuts, so home sellers should consult a local agent to set a realistic price from the beginning,” said Asad Khan, Redfin’s senior economist.

Panic sets in after “cruel summer” for the U.S. housing market

After years of strong seller advantage, industry observers began warning of the flip toward buyer’s advantage in the early summer.

“The housing market has officially flipped and sellers are beginning to panic,” said Graham Stephan, real estate investor and financial commentator, in a YouTube video at the start of summer.

“Homes are sitting on the market for longer, and in 61% of the U.S., prices are starting to drop quite dramatically, depending on where you live,” Stephan said.

His warning has been echoed in recent data. Realtor.com described the period as a “cruel summer” for housing, with buyer activity stalling and new listings surging.

Relief on rates, but not enough

There is a silver lining: one of the biggest drags on the market — high mortgage rates — has started to ease.

According to Freddie Mac, the average 30-year fixed rate has fallen by more than 60 basis points from its 2025 peak.

Still, rates remain well above pre-pandemic levels and are among the highest since the aftermath of the 2008 financial crisis. Many existing homeowners, locked into sub-4% mortgages from the pandemic era, are staying put and further constraining supply turnover.

Fannie Mae projects only a gradual decline, expecting rates to dip just below 6% by the end of 2026, suggesting affordability challenges will persist.