Home Sellers Don’t Hold All the Cards This Spring: 15% of Them Have Slashed Prices

Housing supply is bouncing back after an extended period of stagnation—and sellers are slashing list prices to compete.

The latest monthly housing report from Realtor.com® reveals that the total number of homes for sale in March was 23.5% above last year’s levels, marking five months of inventory growth. The news is especially bright given that prior to this streak, inventory slumped for 17 months straight.

While more homes to choose from might finally grab the attention of buyers deterred by high mortgage rates, what might be a stronger motivating factor is the share of homes with price reductions. This March, a whopping 15% of homes for sale had slashed their price—tied with 2019 as the highest March levels seen since our records began in 2017.

“A growing share of price reductions shows that even though buyers may feel that sellers hold all of the cards in today’s housing market, more sellers are willing to adjust their expectations more often than is typical for this time of year,” says Realtor.com Chief Economist Danielle Hale.

Why are home sellers more flexible?

“Today’s home sellers are driven by a combo of acceptance and unwillingness to put decisions off any longer,” explains Hale. “Family and job situations change, and a growing number of homeowners are choosing not to delay a move any longer. This is a healthy update for the housing market.”

More inventory at lower prices

Nationwide, median home prices rose by 0.2% from February to March, hitting $424,900.

While no home shopper wants to see a higher list price, the rise is not necessarily foreshadowing a massive spike in prices as the year goes on.

“Home prices this year are expected to move largely sideways,” explains Hale. “We’ll see the usual climb from spring into summer, but I don’t think we’ll see a big jump over prices one year ago since many homebuyers are already at the edge of their budgets, and newly constructed homes and steady rents provide cost-effective alternatives that alleviate some of the price pressure we’ve seen on existing homes in recent years.”

Although overall inventory is up, home sellers also gave buyers 15.5% more fresh listings to choose from in March compared with last year, with all but three of the 50 largest metros seeing new listings increase over the previous year.

The metros that saw the largest growth in newly listed homes included Sacramento, CA (+32.5%), Tampa, FL (+29.3%), and San Jose, CA (+25.9%).

These new listings are not only fresh but also budget-friendly. In March, the number of homes for sale priced from $200,000 to $350,000 increased by 30.5% compared with last year.

“Continuing into the spring homebuying season, prospective homebuyers will find slightly more plentiful and affordable home listings,” says Realtor.com economic data manager Sabrina Speianu.

Hale agrees: “The fact that we’re seeing more options among lower-price categories is a welcome sign for entry-level homebuyers and downsizers alike,” she says.

The flood of lower-priced homes might help budget-minded homebuyers who also have to contend with ongoing high mortgage rates, which hit 6.79% last week.

Where the homes are

In March, active inventory in all four regions of the U.S. increased over the previous year. Listings grew by 13.9% in the Midwest, 12.4% in the West, and 0.3% in the Northeast.

Yet buyers looking for the most homes to choose from—specifically in the $200,000 to $350,000 price range—should head South, which saw a whopping 35.8% increase in active home listings compared with the year prior.

While inventory is up year over year, Hale points out that “the shortage of homes for sale isn’t over, as the market continues to see roughly only three homes now for every five that would have been on the market at this time of year in 2017 to 2019. However, this is a big improvement.”

Buyers are pouncing

Some buyers are already paying attention to this bounty of price-reduced listings—and pouncing when they find the right property.

In March, homes spent a median of 50 days on the market—that’s two fewer days than a year prior.

Eager buyers who find a home that’s a bit outside their budget aren’t necessarily out of luck, either.

“Buyers who want to make a below-asking-price offer may find a seller who is willing to meet them in the middle,” says Hale.

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