MW 'Discouraging': Frustrated sellers are cutting house prices by tens of thousands of dollars as buyers grow more selective

By Aarthi Swaminathan

The typical home seller is asking for 9% more than what the home eventually sells for, Redfin data show

When Spencer Bauman bought his first home in May 2020 in Cache County, Utah, the housing market was red-hot. Five years on, as Bauman goes through the process of selling that house, he's finding the market is ice-cold.

Bauman, who works in the aerospace industry, paid $386,000 for the nearly 3,900-square-foot newly built home. He wanted to sell the property and move into a bigger new-build house in Salt Lake City, which is also closer to his family.

But selling the house has been tough. The market had completely flipped, with demand drying up. The home stayed on the market for 72 days before he got an offer on April 26. In March, properties typically remained on the market for half of that duration, 36 days, according to the National Association of Realtors.

Bauman had to drop his asking price by nearly $66,000 to encourage prospective buyers. He couldn't give up because needed to sell; money from the sale would go toward paying for his next home.

"We expected that it would take a little while," he told MarketWatch, because the listing went up in the dead of winter, in February. "But to take multiple months without a single offer was pretty discouraging."

To try to lure buyers, he offered various incentives along the way, including a $10,000 concession that a willing buyer could use at their own discretion. Despite Bauman's long wait, only one buyer came forward. The offer: $540,000. The final price was $75,000 less than what the home had first been listed for, according to the listing's price history.

Bauman's experience is reflective of how the housing market is tipping away from sellers and toward buyers in some parts of the U.S. Though spring is traditionally a busy time for home sales, houses are selling less briskly this spring than they have over the last few years. Inventory is quickly rising, making it more competitive for sellers.

Buyers, on the other hand, are finding more opportunities. Pending home sales rose in March, as buyers jumped into the market amid a brief but big drop in mortgage rates that month.

Read more: Homeowners and home buyers seize a brief - but steep - drop in mortgage rates

Contract signings in the U.S. rose 6.1% in March from the previous month, according to a monthly index released by the National Association of Realtors, or NAR. That's the biggest jump in 15 months.

"Home buyers are acutely sensitive to even minor fluctuations in mortgage rates," Lawrence Yun, chief economist at NAR, said in a statement.

Pending home sales reflect transactions in which a contract has been signed for an existing-home sale but the sale has not yet closed. Economists view the data as an indicator of the direction of existing-home sales in subsequent months.

The pace of pending home sales exceeded expectations on Wall Street. The median forecast was expecting an increase of 1% in March, based on a survey of economists conducted by Dow Jones Newswires and the Wall Street Journal.

Transactions were down 0.6% from a year ago.

The grim state of the U.S. housing market

Setting aside the big jump in sales in March that were primarily driven by the brief dip in mortgage rates, the mood in the housing market overall is pretty glum.

Consumers' home-buying sentiment remains low. High interest rates and high home prices remain a challenge for most home buyers. Uncertainty over the economy and job security, as well as concerns about stock-market volatility, are giving buyers reasons to pause their searches for a house.

Mortgage applications, a leading measure of home-buying sentiment, fell over the last week. Purchase applications, which refer to applications for a mortgage with the intention of purchasing a home, fell 4.4% over the week of Apr. 25, according to the Mortgage Bankers Association.

"Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness, dropping to the slowest pace since February," Joel Kan, deputy chief economist at the MBA, said in a statement. The 30-year fixed-rate mortgage averaged 6.89%.

Read more: Consumer confidence sinks for fifth month in a row to lowest since May 2020

Silver lining for buyers in a slow real-estate market

Selling a home, as a result, has become increasingly challenging. With buyer demand dropping off, some sellers are finding it hard to get offers for the price they're expecting. The median asking price in March was 9% higher than the level at which the median home eventually sold, according to an analysis by real-estate brokerage Redfin $(RDFN)$.

There were 30% more homes actively for sale as of April 19, compared with the same week a year ago, according to a report by Realtor.com.

On the other hand, buying a house might get cheaper in the coming months. "If you're a buyer and you find a home you like that's a bit above your price range, I encourage you to get the conversation started and make an offer anyway," Chaley McVay, a Portland, Ore., real-estate agent with Redfin, said.

"A lot of house hunters are hesitant to offer under the asking price, but in this market it's not out of the ordinary to see sellers lower their prices and give concessions," she added.

Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can fill out this form or write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Aarthi Swaminathan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2025 11:10 ET (15:10 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.