A new report from Realtor.com found that the average home is now selling below its asking price, marking a significant shift from the pandemic-era housing market when bidding wars routinely pushed sale prices above list price.
The report suggests today's market rewards sellers who price correctly from the start and punishes those who do not. Homes that close about four weeks after being listed sell for 1.8 percentage points above the monthly average for comparable homes sold during the same period. By contrast, homes that sit on the market for 18 weeks sell for 1.3 percentage points below the monthly average.
"The pandemic gave sellers a free pass on pricing, and that pass has expired," said Joel Berner, senior economist at Realtor.com. "Today, an overpriced home doesn't just sit — it gets stale, loses leverage, and sells for less than it would have if it had been priced right from the start."
The Four-Week Window
According to Realtor.com, homes that close roughly four weeks after being listed achieve the strongest pricing outcomes of any point in the listing lifecycle.
The top performers in that group typically go under contract within the first two weeks, suggesting buyers move quickly when a property is priced appropriately.
At the other end of the spectrum, homes lingering on the market for 18 weeks sell for 1.3 percentage points below the monthly average, creating a spread of more than three percentage points between the strongest and weakest timing outcomes.
Realtor.com noted that time on market can become a self-reinforcing problem. Overpriced homes attract fewer buyers, and as listings age, negotiating leverage increasingly shifts toward purchasers.
"Price it right and buyers come to you," Berner said. "Price it wrong, and you're chasing them. Four weeks in, the market has already delivered its verdict — you've either got competing offers, or you're about to cut your price."
Price Reductions Peak In The First Month
The report found that four weeks on the market is also when price reductions are most common.
In many cases, sellers who accurately priced their homes are already securing contracts, while those who overshot market expectations begin reducing prices to attract buyers.
Market conditions influence how quickly that adjustment occurs. During the heated housing market of 2021, price reductions peaked around week three. In today's slower market, Realtor.com found the peak has shifted to approximately week six.
The data also showed additional spikes in price reductions around the six-month and 12-month marks, often when sellers reach self-imposed deadlines and become more willing to negotiate.
Mortgage Rates Changed The Equation
The report highlights how dramatically housing conditions have shifted since mortgage rates began rising in 2022.
Throughout much of 2021 and 2022, homes routinely sold above asking price, even during the slower winter months. Today, the average home sells below its final list price, and the gap between original asking prices and eventual selling prices has widened as price reductions have become more common.
Realtor.com attributed much of that shift to higher borrowing costs.
"The steep drop in sale-to-list ratios from 2022 to 2023 tracked the rapid rise in mortgage rates that crushed buyer demand," the report stated.
Persistently elevated mortgage rates have continued to weigh on affordability, limiting buyer purchasing power and reducing the urgency that fueled bidding wars during the pandemic housing boom.
"We've gone from a market where sellers could price aggressively and still get above asking, to one where overpricing has real consequences," Berner said. "Buyers have more leverage than they've had in years, and that shows up clearly in the data."
What It Means For Originators
For LOs, the findings indicate a housing market in which buyers are gaining negotiating power across many parts of the country.
As bidding wars become less common and inventory rises in many Southern and Western markets, borrowers may have greater opportunities to negotiate price concessions, seller-paid closing costs, repairs, and other affordability-enhancing terms.
The report also reinforces a trend many lenders have seen emerge over the past two years: transactions increasingly depend on realistic pricing and effective affordability strategies rather than rapid appreciation and competitive bidding.
Builder-funded incentives, temporary and permanent rate buydowns, and seller concessions remain important tools for helping borrowers qualify and complete transactions in a higher-rate environment.
Realtor.com also found builders remain aggressive in competing for buyers through incentives, including mortgage rate buydowns and pricing flexibility. For originators, those incentives continue to be an important affordability tool in a higher-rate environment.
Northeast Still Has The Upper Hand
Regional differences remain significant. The Northeast is currently the only region where the average home still sells above asking price, while the South and West remain buyer-friendly markets.
According to Realtor.com, many Southern and Western metros now have more homes for sale than before the pandemic, giving buyers more options and increasing negotiating leverage. Inventory remains tighter across much of the Northeast and Midwest.
"Where you list matters as much as how you price," Berner said. "Sellers in the Northeast still have the wind at their backs. In the Sun Belt, the calculus has flipped — buyers have options and they know it."
For mortgage professionals, the findings reinforce an increasingly localized housing market. While inventory growth is creating opportunities for buyers in many regions, tight supply continues to support pricing in others, making local market conditions more important than national averages when advising borrowers.
