Article by:
Austin Williams
LOS ANGELES - After years of steady home price increases, the US housing market is shifting into reverse. Redfin economists say prices are flattening and forecast a 1% year-over-year dip by the end of 2025—only the second time in over a decade prices have declined. The softening comes as more homes sit unsold, buyers pull out of deals, and affordability improves slightly with rising wages.Mortgage rates hovering near 7% and persistent economic uncertainty are cooling demand, leading to higher inventory levels and price cuts—especially for homes that have lingered on the market. Redfin’s latest reports highlight a growing sense among buyers that patience may pay off, though experts caution that waiting too long won’t necessarily yield better deals.
The backstory: After a prolonged seller’s market, the pendulum is swinging. Redfin reports that home sales dropped 1.1% year over year in April, while inventory rose nearly 17%—the highest in five years. With fewer buyers competing and more listings available, sellers are being forced to lower prices or offer concessions.
Typical homes now take 40 days to sell—five days longer than a year ago. Buyers are gaining negotiating power, particularly on homes that have sat for weeks. Redfin agents suggest offering under asking price or requesting seller-paid concessions like rate buydowns or repair credits.
What they're saying: Redfin Premier agent Corey Stambaugh said many sellers are still anchored to the record-high prices of 2021 and 2022, even though the market has changed. "Even though we advise them to list at today’s market value, a lot of them decide to list high to recoup their money," he said. "But those sellers face reality once their home has been sitting for a couple weeks without any offers."
Redfin’s head of economics research, Chen Zhao, added, "We know there’s room to negotiate right now, so that’s the best way to take advantage of the changing market."
By the numbers: The study’s scale and results offer a clearer picture of where the housing market may be heading:
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Local perspective: Florida is home to five of the 10 metros with the highest cancellation rates, driven by rising natural disaster risk and surging insurance and HOA costs. Atlanta led with a 20% cancellation rate, followed by Orlando, Tampa, Riverside (CA), and Miami. Cities with the lowest cancellation rates include Nassau County, NY (4.8%) and Boston (8.1%).
Seattle and Anaheim saw the biggest year-over-year increases in cancellations, with Anaheim jumping 3.1 percentage points to 15.7%.
Big picture view: Redfin expects mortgage rates to hover near 6.8% for the rest of 2025. While President Trump recently cut some proposed tariffs on China, the ongoing trade uncertainty and rising US deficit are keeping the Fed from easing rates further. If tariffs are eliminated completely, or if a recession hits, rates could drop into the 5–5.5% range—but neither scenario is guaranteed.
Zhao warned that while lower rates might sound good, they could be offset by weakened buying power during a downturn. "Even though mortgage rates would be lower, many buyers would have less money to buy a home," she said.
What's next: Buyers have a rare window of leverage, but it may not last. Experts suggest acting sooner rather than later to take advantage of negotiability, especially on homes sitting longer than average. Sellers are advised to list competitively from the start or risk facing price cuts and slow traffic...Read more
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