Are lower prices mixed with lower rates the winning combo? More builders and sellers are hoping a lower price will boost sales.
Home buyers are gaining more negotiating leverageâand many are zeroing in on the price of listings. Theyâre increasingly finding discounts, too.
As home sales remain sluggish this winter, more sellers are reducing their asking prices. In the new-home market, homebuilders are leaning heavily on price cuts and incentivesâmore than at any point in recent yearsâin trying to bring more buyers to the closing table.
In February, 36% of builders reported cutting prices, with the average price reduction at 6%, according to the National Association of Home Builders. Another 65% offered incentives such as closing cost assistance, mortgage rate buydowns or design upgrades.
Some builders are layering incentives. For example, builders like Highland Homespdf are offering up to 50% off design upgradesâup to $100,000âplus up to $10,000 toward closing costs on its select homes through March. David Weekley Homespdf has advertised mortgage rates as low as 4.99% on move-in homes financed through its preferred partner.
The new-home marketâs growing concessions are putting pressure on sellers of existing homes to stay competitive. Nationally, about 18% of existing-home listings had a discount as of late 2025. Whatâs more, nearly 11% of active listings, as of January, had at least three price cuts, according to a new analysis from realtor.comÂŽ of homes listed at its site. In Austin, Texas, 22% of listings had multiple price cutsâdouble the national trend.
The Pressure to âPrice It Rightâ Is On
By the end of 2025, price reductions were becoming more common in some markets. “Your home is worth what someone else is willing to pay ⌠but sometimes that doesnât line up with what sellers think,â says Kourtney Pulitzer, a real estate pro with Sothebyâs International Realty in Palm Beach, Fla. âItâs caused some sellers to overprice.â
Thatâs a costly mistake, she recently told Real Estate Today, because pricing high with the hope of leaving room to negotiate usually âleaves you without anyone to negotiate with. If youâre not priced realistically, buyers assume youâre not being realisticâand they wonât even make an offer.â
Sellers who price unrealistically, especially those who have already bought another home or need to move quickly, may find themselves chasing the market down instead of positioning ahead of it.
Should Sellers Be Worried?
While price cuts are increasing, most homeowners are still sitting on significant equity gains over the past several years.
Since January 2020, the typical homeowner has accumulated $130,500 in housing wealth, according to National Association of REALTORSÂŽ research.
Austin, Texas, for example, has one of the highest shares of listings with price cuts in the country. But the average homeowner in that city has gained roughly $170,000 in housing wealth over the past five years, according to NARâs Metro Market Dashboard. Austin also has one of the highest monthsâ supply levels among the 50 largest metrosâsecond only to Miamiâmeaning sellers are facing more competition and may need to price more strategically.
Some sellers, rather than reducing their asking price this winter, are opting to temporarily delist their home and wait for the spring market, recent studies show.
Nationally, home values remain elevated. The median existing-home sales price reached $398,800 last monthâan all-time high for the month of January, NAR recently reported. Also, about three quarters of U.S. metro areas posted year-over-year price gains in the final quarter of 2025. However, the associationâs research shows the share of appreciating markets has narrowed, signaling moderation rather than a broad decline.
For buyers, âaffordability conditions are improving,â says Lawrence Yun, NARâs chief economist. NARâs Housing Affordability Index shows housing is at its most affordable level since March 2022, largely because wage growth has outpaced home price gains and mortgage rates are at the lowest level in three years.
Also, the housing market has not been showing signs of distress. NARâs research shows that foreclosures and short sales remain at historical lows, accounting for just 2% of January sales, down from 3% a year earlier.
