Seller price adjustments are helping keep the purchase market moving even though higher mortgage rates continue to strain affordability and the summer housing market is losing momentum.
One in five active listings had a price reduction in July, while pending sales increased from a year earlier for the eighth consecutive month, according to Realtor.com’s July Monthly Housing Trends Report.
The national median list price fell 2.4% year over year to $428,950, marking the ninth consecutive month of annual declines. The decline was slightly smaller than June’s 2.5% drop.
Pending sales rose 1.3% from July 2025. Growth, however, slowed from 4.1% in May and 3.7% in June, leaving open the question of whether the housing market is undergoing a normal seasonal slowdown or beginning to lose more substantial ground.
For LOs, the combination of lower asking prices, more price reductions, and continued contract activity offers a reason to reconnect with buyers who previously found the monthly payment out of reach. Realtor.com’s data do not establish that price cuts caused the increase in pending sales, but they indicate that buyers are still entering contracts as more sellers adjust their expectations.
“July’s data show a market that is cooling seasonally, not coming apart,” said Danielle Hale, chief economist at Realtor.com. “Sellers are making more price adjustments as summer progresses, and buyers are responding more selectively, but homes are still going under contract at a faster pace than last year.”
The question for the coming months, Hale said, is whether price reductions continue to support buyer activity or signal that sellers are getting ahead of softer demand.
Price Cuts Move Closer to Last Year’s Pace
The share of active listings with a price reduction increased to 20% in July, up 1.2 percentage points from June. The share was just 0.6 percentage points below July 2025 after running nearly 2 percentage points below year-ago levels throughout the spring.
Twelve of the 50 largest metropolitan areas had price reductions on at least one-quarter of their active listings.
Cuts were most common in Portland, Oregon, where 31% of active listings had a reduction, followed by Denver at 30.9% and Dallas at 28.3%.
They were least common in Hartford, Connecticut, at 9%; New York at 9.7%; and Buffalo, New York, at 10.5%.
The regional pattern also shifted. Although price reductions remained less common in the Northeast and Midwest than in the South and West, their prevalence moved above year-ago levels in both regions.
The share of reduced listings increased by 1 percentage point from last year in the Northeast and 0.3 percentage points in the Midwest. Price-cut shares remained below last year’s levels in the South and West.
“The jury is still out,” said Jake Krimmel, senior economist at Realtor.com. “There are no signs of time on market increasing, but price cuts are creeping up, and new listings have pulled back.”
Krimmel said price cuts should be considered alongside contract activity and time on the market. If sellers reduce prices and homes continue to sell without remaining on the market longer, the cuts may represent a shift toward buyers rather than a warning of a broader housing downturn.
Homes Move Slightly Faster Than Last Year
The typical home spent 57 days on the market in July. That was four days longer than in June, consistent with the normal summer slowdown, but one day shorter than in July 2025.
It was the first outright annual decline in median time on the market following 26 consecutive months in which homes took longer to sell than they had a year earlier. The July pace also matched the typical pre-pandemic level for the month.
Active listings increased 2.1% from both June and last July to approximately 1.13 million. National inventory remained 11.6% below typical 2017–2019 levels.
New listings totaled 423,732, down 8.6% from June but unchanged from a year ago.
Inventory increased most sharply in the Midwest, up 9.3%, and the Northeast, up 8.3%. It edged up 0.6% in the West and declined 0.2% in the South.
Among the 50 largest metropolitan areas, Minneapolis recorded the largest annual inventory increase at 29.3%, followed by Louisville, Kentucky, at 24.9% and Seattle at 21.4%.
Jacksonville, Florida, posted the largest decline at 20%, followed by Miami at 16.9% and San Francisco at 16.3%.
Asking Prices Reflect a Regional Divide
The median list price per square foot declined 2% from a year earlier, indicating that the drop in the national median was not solely attributable to a change in the size or type of homes being listed.
Price per square foot declined in 34 of the 50 largest metropolitan areas.
Regional results remained sharply divided. Median asking prices fell 3.9% in the West, 2.5% in the South, and 1.4% in the Northeast. The Midwest recorded a 0.2% increase.
After accounting for the size of listed homes, prices increased 1.8% in the Midwest and 0.6% in the Northeast. They declined 2.9% in the South and 1.2% in the West.
Austin, Texas, recorded the largest annual decline in list price per square foot at 8.5%. Memphis, Tennessee, followed with a 6% decrease, while Tampa, Florida, declined 4.8%.
Providence, Rhode Island, recorded the largest increase at 8.3%, followed by Indianapolis at 4.8% and Hartford at 4.5%.
The wide variation means the opening for originators will be highly market-specific. A borrower in a market with widespread reductions may have more room to revisit a previously unaffordable property, while buyers in markets with limited inventory and continued price growth may see little additional relief.
Higher Rates Could Test Buyer Demand
Realtor.com’s revised midyear forecast anticipated mortgage rates averaging approximately 6.3% for the rest of 2026. Krimmel said that projection was based on an easing of geopolitical tensions.
“With the Iran conflict heating back up and oil prices at their highest level since May, that rate outlook may prove too optimistic,” Krimmel said. “It looks like we’ll be on ‘housing market resilience watch’ for the foreseeable future.”
Realtor.com will be watching price reductions, pending sales, and delistings together in August. All three measures deteriorated last summer as sellers cut prices, pending sales fell, and more owners removed their homes from the market.
The July numbers do not show a repeat of that retreat. Pending sales remain above last year’s level, and homes are moving slightly faster, even as sellers make more price adjustments.
For LOs, the report suggests that the mortgage rate is not the only number worth revisiting with prospective buyers. A reduced asking price can change the required loan amount and monthly payment, potentially bringing a previously unaffordable property back within range.
Whether that is enough to sustain purchase activity will depend on what happens next: If price reductions continue to produce contracts, the market may be experiencing an orderly shift toward buyers. If cuts accelerate while pending sales weaken and delistings rise, August could instead reveal the beginnings of a more stagnant market.
*This article was primarily written by a human author. AI tools were used in a limited capacity for research assistance or light editing.
