Home Sellers Cut Prices at Record Pace, but High Mortgage Rates Limit Buyer Gains

A record share of U.S. home sellers are cutting asking prices, yet the advantage remains tilted toward a narrow slice of buyers who can pay cash or absorb 7%-plus mortgage rates.

In the four weeks ended Sept. 20, 21.1% of sellers with active listings reduced their price, the highest level for this time of year since Redfin began tracking the metric in 2022. The national figure masks sharp regional divides. Denver led the 50 largest metros with 30.9% of listings taking a cut, followed by Indianapolis at 29.9% and three Texas markets — San Antonio, Dallas and Austin — all above 26%.

At the other extreme, San Francisco saw just 9.6% of listings reduced, the lowest share among major metros. A surge of highly paid artificial-intelligence workers deploying salaries, bonuses and equity into Bay Area housing has kept that market tilted toward sellers, along with Newark, Chicago, New York and Miami.

Redfin estimates sellers outnumbered buyers by 58% in August, the widest gap in data going back to 2013. But Bright MLS chief economist Lisa Sturtevant pushed back on the “buyer’s market” label for the Mid-Atlantic region covering six states and Washington, D.C. “Inventory is still very tight and prices remain near record highs in many local markets,” she said, even while acknowledging more sellers are cutting prices.

The disconnect stems from affordability. The average 30-year fixed mortgage rate hit 7.28% as of Oct. 1, according to Freddie Mac, the highest since November 2023 and nearly a full percentage point above a year earlier. At that level, many would-be buyers hit debt-to-income limits before they can take advantage of price reductions.

That dynamic amplifies the edge for all-cash buyers. Research co-authored by Michael Reher, associate professor of finance at UC San Diego’s Rady School of Management, found cash purchasers pay roughly 10% less than financed buyers on average. Sellers accept the discount to eliminate the risk that a mortgage falls through — a risk that rises when higher rates push monthly payments closer to qualification thresholds.

Reher said rising price cuts strengthen the case for cash buyers who have the liquidity, but cautioned that the decision depends on conditions in each target market. The average 30-year fixed rate stood at 7.28% as of Oct. 1, its highest level since November 2023.