The U.S. housing market has a pricing problem, and sellers are starting to feel it. More than one in five homes for sale now carries a price cut as high mortgage rates keep many potential buyers on the sidelines.
The share of active listings with price reductions reached 20.8% nationwide in September 2026, according to Realtor.com. That was the highest September rate since 2018 and the highest reading for any month since October 2022.
Redfin data reveals the same phenomenon. During the four weeks ending September 20, 21.1% of active sellers lowered their asking price, the highest share for that period since Redfin began tracking the figure in 2022. Those reductions point to a housing market where sellers have lost some control. Buyers have more homes to choose from, but high borrowing costs mean many still cannot afford to make an offer.
Mortgage Rates Are Squeezing Home Buyers
That increase can change a household’s buying budget quickly. A higher rate raises the monthly payment even when the home’s purchase price stays exactly the same. A buyer who could comfortably afford a $500,000 home with a 6% mortgage may have purchasing power closer to $450,000 at 7%. That creates a large gap between what sellers hope to receive and what buyers can actually finance.
Sellers are responding by trimming asking prices, but small reductions do not always solve the problem. A cheaper house can still cost more each month if the buyer has to finance it at a much higher rate.
The problem becomes more obvious when homes remain listed for weeks without serious offers. Sellers then have to decide between cutting the price, offering concessions, pulling the property from the market, or waiting for conditions to improve. Some homeowners are choosing not to sell at all. Others have removed listings instead of accepting a lower price, which means the price-cut numbers do not capture every seller struggling with weaker demand.
The pressure also looks very different across the country. Western markets recorded the biggest annual increase in price reductions during September, with 22.8% of listings receiving a cut.
Salt Lake City stood out with roughly one-third of active listings showing a reduction. Denver followed at 31.5%, while Portland, Oregon, reached 31.3%, according to Realtor.com data. Redfin’s metro analysis also placed Denver near the top. It found that 30.9% of active Denver listings had received a price cut, followed by Indianapolis at 29.9%.
Sellers Face More Competition as Inventory Builds
That imbalance changes the conversation around the kitchen table. A seller can no longer assume that a buyer will overlook an ambitious asking price simply because few competing homes are available.
The house down the street matters again. If two similar properties are available and one offers a better price, cleaner condition, or stronger concessions, buyers have little reason to choose the more expensive option.
The discounts themselves can become substantial. Redfin data from June showed that sellers who reduced their prices made an average cut of about 4%. Some cities have seen even deeper reductions. Pittsburgh’s median price cut reached roughly 6.71% by September 30, followed by Buffalo at 6.26% and Austin at 6.19%.
Expensive markets can produce much larger reductions in dollar terms. In San Jose, the median September price cut approached $77,000, although that amount represented a smaller percentage of the area’s roughly $1.2 million median list price. Not every major market is seeing the same pressure. San Francisco had fewer than 10% of sellers reducing prices, making it a sharp contrast with markets such as Denver and Salt Lake City.