For years, homeowners enjoyed meaningful leverage during property sales due to soaring values and limited options for buyers. That dynamic is now undergoing a substantial reversal. Across the United States, Sellers are increasingly facing challenges in securing favorable terms, driven by a shortage of qualified purchasers and growing economic uncertainty.

Negotiating Power Swings to Buyers

in several key markets, notably in the South and West, homeowners willing to sell are now more inclined to offer concessions to attract buyers. These concessions can include price reductions, funds to lower mortgage rates, and coverage of closing costs or repair expenses discovered during inspections.

Potential buyers are hesitant at current asking prices, while a growing supply of new construction offers alternative choices and adds pressure on sellers to make their properties more appealing. The national median home listing price experienced a slight increase in July, but numerous metropolitan areas reported declines, signaling a changing market.

Market Slowdown and Inventory Rise

Despite this shift, the housing market continues to experience a slump. Sales of existing homes were approximately 1.3% lower through the first seven months of this year compared to the same period last year when sales hit a nearly 30-year low. The national median home listing price in July stood at $439,450, according to Realtor.com.

However, affordability remains a major concern. Realtor.com data indicates that a household earning the median U.S. income can realistically afford a home priced at around $298,000, assuming a 20% down payment and a 6.74% fixed mortgage rate. This means approximately 70% of potential homebuyers are priced out of the market.

The market has been facing headwinds since 2022, when mortgage rates began their ascent from historic lows, reducing the number of homes available for sale while concurrently driving up prices.

Nationally, homes are taking longer to sell and more properties are remaining on the market. Active listings have increased for 21 consecutive months, climbing nearly 25% year-over-year. The supply of homes for sale is becoming more balanced, although some regions are experiencing more significant shifts than others.

Regional Variations

Texas and florida have seen particularly sharp inventory increases, fueled by robust new construction. Buyers in the South and West enjoy greater negotiating power, while markets in the Midwest and Northeast remain constrained by inventory levels that are 40% to 50% below pre-pandemic norms.

Doug McCormick, an 80-year-old retired business owner in Evergreen, Colorado, has yet to receive any offers on his four-bedroom home, even after reducing the price from $1.3 million to $1.28 million.He is now considering renting the property.

Annie Foushee, a Redfin agent in Denver, notes that even with price reductions, many homes continue to sit unsold. Several metropolitan areas have witnessed notable declines in median listing prices, including Austin (-4.9%), Miami (-4.7%), Chicago (-4.4%), Los Angeles (-4.2%), and Denver (-4%).

Buyer Success Stories

Lindsay and John Olesberg successfully navigated the market shift,selling their home in Albuquerque for $40,000 below the original listing price and then securing a home in Austin for $30,000 below the asking price,with the seller also covering $1,000 in fees. Their experience highlights the opportunities available to buyers in the evolving market.

Tammy Tullis, a finance consultant in Miami, temporarily removed her property from the market after receiving low-ball offers despite a $100,000 price reduction.

Understanding the Long-Term Trends

The current shift in the housing market is a natural correction following a period of unprecedented growth. Factors such as rising mortgage rates, increased inventory, and economic uncertainty are all contributing to the slowdown. while price declines are occurring in some areas, a full-scale housing crash is not expected.

Did You Know? The Federal ReserveS influence on mortgage rates is indirect. While they control short-term rates, most mortgages are tied to the yield of the 10-year Treasury bond.

Frequently Asked Questions about the Housing Market

• What is causing the shift in the housing market? Rising mortgage rates, increased inventory, and economic uncertainty are key factors.
• Are home prices falling nationwide? While some areas are experiencing price declines, the national median price has only slightly increased.
• is now a good time to buy a home? For qualified buyers,this market presents opportunities for negotiation and better deals.
• Should I sell my home now? It depends on your location and financial situation. Consult with a real estate professional.
• What is the outlook for mortgage rates? Economists predict rates will remain near the mid-6% range for the remainder of the year.