During the COVID years housing unexpectedly became a strong seller’s market. The demand for housing increased sharply as people rethought their circumstances and lower interest rates, meant to support the economy, made home purchases more affordable. Since then, the market has shifted. Higher interest rates, a result of high inflation from pandemic spending, have made buying a home more expensive for those who cannot afford a large down-payment. As a response home sales fell as homeowners were unwilling to sell and give up their low mortgage rates to upgrade creating a shortage of starter homes. This reduction in sellers, combined with a decline in buyers, allowed home prices to stay high despite the headwinds, but the high prices caused transactions to fall to a 30-year low according to the Wall Street Journal.
Now, the pendulum seems to be swinging back the other way, possibly transitioning into a buyer’s-market, where buyers have negotiating power. It was clear that the seller’s strike could not last forever. Homeowners may be able to delay selling but eventually the number of homes for sale would have to normalize. Combine this with continued weak demand and the result is a market where buyers are able to negotiate lower prices and better terms.
According to the Wall Street Journal the average sales price in 2025 was 8% below the asking price, the largest discount since 2012. In December the national market had 600,000 more sellers than buyers. These dynamics may create an opportunity for homebuyers who are in good financial shape and want to get in before demand recovers.