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Housing Market Cools: 70% of Homes See Price Reductions

  //house-home.news-articles.net/content/2026/02/2 .. rket-cools-70-of-homes-see-price-reductions.html
  Published in House and Home on Tuesday, February 24th 2026 at 3:50 GMT by CNBC
      Locales: Not Specified, California, UNITED STATES

By Amelia Hayes, Financial Correspondent - February 24, 2026

Recent data paints a stark picture of a cooling housing market, with a new report revealing that a staggering 70% of homes sold in the past month have undergone price reductions. This dramatic shift signals a definitive end to the frenzied seller's market that characterized much of the post-pandemic era, and a return to conditions more favorable to buyers.

The report, a collaborative effort between Redfin and Zillow, underscores a growing trend of increased inventory, rising interest rates, and a cautious consumer base all converging to exert downward pressure on home prices. While a complete market crash isn't anticipated, the rapid change from a seller's paradise to a more balanced - and increasingly buyer-centric - landscape is undeniable.

For the past several years, a combination of low interest rates and limited housing supply fuelled intense competition amongst buyers, leading to bidding wars, waived contingencies, and prices soaring to unprecedented levels. Now, the script has flipped. Buyers, facing a significantly higher cost of borrowing due to interest rate hikes implemented by the Federal Reserve throughout 2025 and early 2026, are taking their time, exercising greater scrutiny, and refusing to overpay.

"We've observed a fundamental change in buyer psychology," explains Dr. Eleanor Vance, a senior housing analyst at Redfin. "The 'fear of missing out' that drove so much activity in the last few years has largely dissipated. Prospective homeowners are now factoring in broader economic uncertainties - concerns about potential job losses, inflation, and the overall financial outlook - and are approaching the market with a more pragmatic mindset."

The increase in housing inventory is exacerbating the situation. New construction, while still below historical averages, has steadily increased over the last six months. Simultaneously, many homeowners who delayed selling in anticipation of even higher prices are now entering the market, contributing to a growing supply of homes for sale. This abundance of choice empowers buyers to be more selective and less willing to compromise on price or condition.

Specific regional trends highlight the extent of the correction. Previously red-hot markets like Austin, Texas; Phoenix, Arizona; and Boise, Idaho, are now seeing homes linger on the market for weeks, even months, a stark contrast to the days when properties received multiple offers within hours of listing. Sellers who stubbornly cling to pricing levels reflective of the 2024 peak are finding themselves increasingly isolated, forced to repeatedly lower their asking prices or ultimately withdraw their listings.

"The era of sellers dictating terms is over," asserts Marcus Bellwether, a Zillow economist. "Buyers are now in the driver's seat, and sellers must adapt to the new reality. This means realistic pricing, focusing on property improvements to enhance appeal, and a willingness to negotiate."

Looking ahead, experts predict this trend will likely persist throughout the spring and summer selling seasons. The Federal Reserve has signaled its intention to maintain relatively high interest rates until inflation is demonstrably under control, further dampening buyer demand. Unless there is a significant surge in demand or a substantial decrease in inventory, pressure on sellers is expected to intensify.

However, not all experts view this correction negatively. Some economists argue that a cooling housing market is a necessary step towards a more sustainable and equitable system. "The rapid price appreciation of the past few years was simply unsustainable," says Dr. Anya Sharma, an economist specializing in housing affordability. "This correction, while painful for some sellers, will ultimately make homeownership more accessible to a wider range of people."

For potential sellers, the key takeaway is clear: accurate pricing, strategic improvements, and a willingness to negotiate are crucial for a successful sale in the current market. Ignoring these realities risks prolonged listing times and ultimately accepting a lower price than desired. For buyers, now may be an opportune time to enter the market, as increased inventory and reduced competition provide greater leverage and negotiating power. The landscape has undeniably shifted, and understanding these dynamics is essential for navigating the evolving housing market of 2026.