Written by: Internal Analysis & Opinion Writers
In today’s housing market, a widening gap is emerging between what sellers hope to get and what buyers are actually willing to pay. After years of surging home prices, many homeowners are still pricing their properties at or near peak levels, clinging to values established during the pandemic boom. Buyers, however, are entering the market with a different mindset—one shaped by rising mortgage rates, economic uncertainty, and tighter budgets.
The result is a market stalemate. Sellers, hoping to cash in on record-high home values, often list homes at what agents describe as “aspirational pricing.” Buyers, however, are showing signs of fatigue and are far less willing to stretch financially, especially with borrowing costs significantly higher than they were just two years ago.
The disconnect has led to an increase in price reductions. According to real estate data, nearly one in five homes currently on the market has had its asking price lowered at least once. Properties are also sitting longer before going under contract, a marked difference from the lightning-fast sales pace seen during the height of the housing frenzy.
Buyers today are facing a perfect storm: elevated interest rates, inflationary pressures, and the lingering effects of an affordability crisis. The average 30-year fixed mortgage rate remains around 7%, substantially increasing monthly payments and reducing purchasing power. With wages not keeping pace with housing costs, many would-be buyers are holding off or negotiating more aggressively.
This shift is placing pressure on sellers to realign expectations. Real estate agents across the country are reporting increased use of concessions, including seller-paid closing costs, interest rate buydowns, and even home repairs or upgrades, in order to close deals.
In cities like Austin, Boise, and Phoenix—markets that saw dramatic price runups during the pandemic—sellers are feeling the brunt of the shift. Listings in these areas are frequently facing markdowns or sitting unsold for weeks, if not months. Buyers are no longer racing to beat the competition; instead, they’re carefully weighing their options and often waiting for price cuts before making a move.
Despite these challenges, demand hasn’t disappeared entirely. Well-priced homes in desirable neighborhoods still attract attention, especially if they are move-in ready and reflect current market values. Bidding wars still occur, but they’re far more rare and typically limited to homes that are both competitively priced and in high-demand areas.
Real estate professionals suggest that this phase could signal a rebalancing of the housing market. After years of being dominated by sellers, conditions are inching toward equilibrium, where neither party holds a significant advantage. This normalization is seen by many as a healthy adjustment that could lay the groundwork for more sustainable long-term growth.
For buyers, the evolving market presents opportunities to be more selective and strategic. With less pressure to act immediately, they can take the time to shop around, negotiate, and potentially benefit from seller incentives. However, affordability remains a concern, and many buyers are still being priced out of the markets where they’d prefer to live.
Sellers, on the other hand, are being advised to approach pricing with realism. “You can’t list at 2022 numbers and expect 2023 results,” said one industry analyst. The key, they say, is to understand local trends, price appropriately from day one, and be ready to adjust quickly if the market isn’t responding.
The broader economic outlook also plays a role in how the housing market unfolds in the months ahead. If inflation continues to decline and the Federal Reserve eases interest rates, affordability could improve. But until then, the pricing standoff is likely to persist, particularly in overheated markets.
Ultimately, both sides of the transaction are feeling the weight of a transitional moment. Buyers want value. Sellers want returns. The housing market, caught in between, is now adjusting to the reality that neither can have it all.
