Jan 17, 2026
While home prices have been on the rise in recent years, potential buyers started to see a little bit of relief near the end of 2025.
In fact, the price cuts that began late last year mark the steepest discounts that buyers have seen in almost a decade. According to a Zillow’s analysis of data from October 2025, typical U.S. home listings saw price cuts averaging $25,000, which is likely the result of homes sitting on the market for longer than expected (1).
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That $25,000 figure is the average overall discount after cumulative cuts — the typical cut is $10,000 — which means sellers across the country have taken to repeatedly cutting their asking price in an attempt to attract offers. In some cities, buyers are seeing tens of thousands of dollars shaved off of listings.
As sellers appear to be showing a greater willingness to negotiate, this trend seems to be a signal that seller expectations in today’s housing market are evolving.
Times are a-changin’ for sellers
The recent drop in home prices appears to indicate that sellers are becoming more willing to part with the gains they saw during the pandemic, when home values were soaring.
“Most homeowners have seen their home values soar over the past several years, which gives them the flexibility for a price cut or two while still walking away with a profit,” said Kara Ng, senior economist at Zillow. “These discounts are bringing more listings in line with buyers’ budgets.”
Unlike the pandemic-era market, buyers can now take their time to secure a deal. Meanwhile, the combination of lower prices in many markets and declining mortgage rates has contributed to making homes the most affordable they’ve been in the last three years.
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Where are prices dropping the most?
Coastal markets are seeing the largest cuts in dollar terms, especially in California: the median cumulative price cut in San Jose was $70,900, ($49,000 of that in October alone).
Los Angeles followed with median cuts of $61,000, while San Francisco's cuts came out to $59,000, according to Zillow. New York is the only non-California market in the top five, with cumulative cuts of $50,000 — which is on par with San Diego.
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More affordable cities report smaller discounts by dollar amount, but the cuts to asking prices in these markets represent greater savings in terms of a percentage of home values. In New Orleans, for example, the median price reduction represents just over 9% of the city's typical home value.
How buyers and sellers can navigate an evolving housing market
With the market appearing to tilt in favor of buyers, now could be a great time to buy. Here are some tips for buyers, as well as sellers who are likely hoping to get the most out of the sale of their homes.
For buyers, here are a few things to keep in mind:
- Look for the “days on market” number on listings; the longer the property has been sitting without interest, the more likely the seller is to be receptive to offers below the listing price
- Check the price history; if the seller has already dropped the asking price once or more, that signals a seller who might be open to negotiation
- Buyers in more affordable metros shouldn’t expect the same dollar figure discounts as less affordable locations. Instead, focus on the percentage reduction to see if you’re getting a bargain
- Winter is typically a slow time of year for real estate sales, so savvy buyers could potentially leverage the lack of competition into another bargaining tool
For sellers, these tips could help you with securing the best deal:
- Repeated cuts can weaken your leverage, so price realistically when you list your property. Research the current market conditions in your area and use that as a guide, rather than relying on expectations dating back to the peak of the pandemic market
- Remember that stale listings make for a harder sell than smart price cuts
- Expect buyer pushback, as buyers likely know the market has shifted. Be open to negotiation and willing to bend on factors such as closing dates
- Tap your real estate agent’s expertise for pricing strategy; an agent who’s plugged into the local market’s trends and dynamics will have a clear idea of how to get the most for your property
- Presentation counts, so don’t neglect staging and remember the importance of curb appeal, which will be every buyer’s first impression. Completing needed upgrades ahead of putting the property on sale could also make it more attractive to buyers
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Zillow (1)
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Libby MacDonald is a Senior Staff Reporter at Moneywise. She has extensive experience in business and consumer reporting, having covered topics including insurance, wealth management, housing and equities.
