Inventory is surging across the U.S. and home sales are slowing down as sellers list their properties for a price much higher than buyers, who are still feeling the squeeze of rising costs and historically elevated mortgage rates, are willing to pay.
According to a new report by Redfin, the typical home seller in the U.S. wants $38,672—about 9 percent—more than the typical property in the country is selling for. That is the biggest gap between listed price and sale price since May 2020, at the height of the COVID-19 pandemic.
Why It Matters
Home prices skyrocketed across the U.S. since the start of the health emergency, climbing from a median sale price of $302,487 in March 2020 to $431,078 in March 2025, as per Redfin data. This vertiginous rise was fueled by an explosion in demand during the pandemic, encouraged in part by low mortgage rates, and a historic lack of supply in the U.S. housing market.
Home prices are still rising, making it hard for many Americans to step on the property ladder, but mortgage rates still hovering around the 7 percent mark, and growing uncertainty about the future of the U.S. economy are dampening demand. While inventory is finally inching up, buyers remain cautious, forcing sellers to adjust their expectations and slash their initial asking price to meet them where they are at.
What To Know
The median asking price for a typical home in the U.S. is currently $469,729, according to Redfin, while the median sale price is $431,057—the biggest gap since 2020.
These numbers show that the U.S. housing market is finally turning in favor of buyers, who now have more options in terms of inventory and more negotiating power, though they may not have much more purchasing power.
Sellers, on the other hand, have been “slow to adjust,” Redfin said, and that is why there is still such a large gap between asking and sale prices. Instead of adjusting their expectations to the new reality of the U.S. housing market, where inventory is growing and buyers are reluctant to make such a significant purchase like that of a home at a time of high economic uncertainty, sellers are hoping to recoup the investments they made in 2021-22 or trying to sell at last year’s price.
It is not working out for sellers, Redfin said. “Buyers and sellers are on different pages, which is the crux of the divergence in sale prices and list prices,” the report reads. “Sellers continue to demand last year’s record-high prices, but with mortgage rates still so high, buyers have reached their limit and aren’t budging.”
List prices, according to the real-estate brokerage, are now growing more than twice as fast as sale prices. The median list price climbed 6.2 percent in March, compared to a year earlier—the biggest increase since September 2022.
On the other hand, the median sale price shot up 2.5 percent—the smallest increase since September 2023.
While inventory is growing and mortgage rates remain high, sales are falling. In March, according to data from the National Association of Realtors (NAR), existing-home sales fell 5.9 percent month-over-month and 2.4 year-over-year. Redfin data, which includes sales of both new and existing homes, recorded a 2.9 percent drop in March compared to a year earlier.
What People Are Saying
Redfin Senior Economist Elijah de la Campa said in a press release: “Homebuyers today have the upper hand because they’re outnumbered by sellers, and that’s a tough pill for sellers to swallow.
“When buyers and sellers are on different planets, one side eventually has to give in, and it’s looking like it’s going to be sellers this time. Rising inventory, price drops and seller concessions indicate this is already starting to happen, and sale-price growth will likely continue to slow as a result.”
Chaley McVay, a Redfin Premier real estate agent in Portland, Oregon, said: “A lot of sellers are bringing up comps from a year ago, and I have to tell them that’s no longer the environment we’re in. They’re holding onto this idea that they lost money.”
She added: “I explain that they didn’t lose money because however much money they could have made in the past is hypothetical money. The most important thing you can do as a seller right now is fairly price your home. If you overprice, chances are you’ll get no activity, and then it will become even harder to recoup your investment.”
NAR Chief Economist Lawrence Yun said in a recent statement: “Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates. Residential housing mobility, currently at historic lows, signals the troublesome possibility of less economic mobility for society.”
Realtor.com senior economist Joel Berner said in a statement shared with Newsweek: “Unfortunately, without significant relief from mortgage rates or an end to the fears of recession, March’s slow performance may be a sign of things to come through the peak of the 2025 homebuying season.”
What Happens Next
A majority of experts expect home prices to continue growing throughout 2025, though at a much slower pace than they have in previous years.
JP Morgan analysts believe the market will remain largely “frozen” this year, with a projected subdued price growth of 3 percent or less. NAR also expects a price growth of about 3 percent by the end of the year.
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