Spike In Homeowners At Risk Of Selling At A Loss

Nearly 6%, or roughly one out of every 17, of U.S. home sellers are at risk of taking a loss if they sell today — a 36% jump from this time last year, according to a new report from online real estate brokerage Redfin, which is now "Redfin Powered by Rocket" since Rocket Companies has closed its acquisition of the company.

While the national figure remains historically low, risk levels vary widely across regions, home types, and purchase timelines, offering mortgage professionals new insights into seller motivation and market soft spots.

The most vulnerable cohort, according to the report? Sellers who bought post-pandemic. Nearly one in six (16.4%) of these homeowners are at risk of selling for less than what they paid, compared to just 1.8% of those who purchased before COVID-19.

“The longer someone has owned their home, the more likely they are to come out ahead,” said Redfin Senior Economist Asad Khan. “But that’s little comfort for those who bought more recently and may be facing a loss. Not every homeowner is listing because they want to — some are listing because they have to.”

Metro Markets Under Pressure

Risk is most pronounced in a handful of key metros. In San Francisco, 19.6% of homes on the market are likely to sell below their purchase price — the highest share among the 50 largest U.S. metros. Austin, Texas (13.8%) and Oakland, Calif. (11%) follow closely.

At the other end of the spectrum, Providence, R.I. and New Brunswick, N.J. have just 0.5% of home listings at risk of a loss, with Anaheim, Calif. not far behind at 1%.

The pain is particularly acute for condos. More than a third (35.6%) of San Francisco condos for sale are at risk of selling at a loss, for instance.

“A lot of condo sellers have a choice to make: stay put, or take a loss,” said Redfin agent Andy Potarf in Denver, who recently helped a client sell a condo for $45,000 less than their 2021 purchase price. Many face leasing restrictions from HOAs or municipalities that further limit their options.

Risk And Opportunity

For lenders and brokers, these shifts may create opportunities — especially among first-time homebuyers and move-up buyers who are gaining some pricing leverage.

“We are seeing more opportunities for buyers to pay a little less than they would have just a year or two ago,” Khan noted. “That’s a meaningful shift for anyone who’s been watching and waiting for prices to come down.”

The share of listings purchased post-pandemic now represents 16.3% of all active listings, suggesting a sizable segment of potentially flexible sellers.

Looking ahead, Redfin forecasts a modest 1% national home price drop by year’s end. If that happens, the share of homes at risk of selling at a loss will rise to 6.4%. A 3% decline would bump that figure up to 8.1%.

For mortgage professionals, these trends signal both risk and opportunity — a softer pricing environment paired with greater urgency among certain sellers could help reignite purchase activity for the right buyers.