By Julie Gerstein | Realtor
The U.S. housing market continues to respond to the Federal Reserve’s September interest rate cut, which brought mortgage interest rates down to 6.2% in mid-September—the lowest since September 2023.
While mortgage rates have edged up since then, the ripple effect of falling rates is clear: As more homes hit the market, sellers are being forced to make price reductions to compete.
The median home price dropped nearly $5,000 between August and September, from $429,990 to $425,000. Even better news for buyers? Price reductions increased by 0.9 percentage points this September compared with the same time last year, according to the Realtor.com® September Housing Market Trends Report.
“The percentage of homes with price reductions increased from 17.7% in September of last year to 18.6% this year,” says Realtor.com senior economist Ralph McLaughlin in his recent analysis. “What’s more, the overall share of inventory with price cuts is 1.0 percentage points higher than the shares seen between September 2017 to September 2019.”
More housing stock equals less competition
What’s driving the price cuts in addition to more moderate mortgage rates? It’s a classic case of supply and demand. Lower interest rates have drawn both buyers and sellers into the market, and sellers who have already listed their homes are now forced to offer more competitive prices to compete with new inventory.
