Persistently high mortgage rates are having a bigger impact on buyers than on sellers as the home shopping season approaches. Though competition varies greatly by region, most buyers in the market today have a good chance of seeing a price cut on their saved listing. Nearly 23% of listings received a price cut in January, a record high in Zillow data for this time of year. 

Rate lock’s hold appears to be losing its grip as homeowners find themselves in a solid financial position and ready to move on — even if it means taking a price cut on their listing. Home equity is near record highs and the general economy and financial markets are surprisingly strong. 

Buyers, on the other hand, are feeling the sting of mortgage rates that ticked up to 7.04% in January. That’s the highest level since May, and significantly higher than the mid-6% rates seen in January last year. Rates gave buyers facing affordability challenges stronger headwinds in closing the deal – newly pending sales fell 3.6% year over year. 

What sellers are seeing

Sellers appear less impacted by rate movements than buyers. New listings hitting the market from existing owners rose 11.5% year over year. As homeowners rack up equity and encounter pressing needs to sell, their current homes and mortgage rate are easier, or even necessary, to let go of. Zillow surveys of recent sellers show 78% were influenced by life events to make their decision to sell, such as landing a new job or a change in family size. The same survey found just 54% of sellers then bought a home, the lowest share since 2024 and down from 70% last year. 

Despite the challenges for buyers, plenty of sellers are getting more than they asked for. Nearly 25% of homes that sold in December — the latest data available — did so for more than the original asking price. That’s compared to about 19% before the pandemic.

What buyers are seeing

While high rates are frustrating, buyers have a good chance to find deals on the margins. Zillow’s market heat index shows buyers have more power in negotiations than in any January over the past five years. 

Zillow data shows 22.8% of sellers cut the price of their listing last month, the largest portion for any January since 2018, when Zillow began tracking the metric. The share of listings with a price cut rose the most year over year in Denver, Las Vegas, San Diego and Austin. 

Price cuts are most common in Phoenix, where they’re found on 33.5% of listings, Tampa (32.4%), Jacksonville (30.8%), Orlando (29.1%) and Dallas (28.7%). 

Nationally, homes that sell are typically under contract in 38 days. That’s nine days slower than last year but nearly 10 days faster than pre-pandemic norms. 

However, regional variation in competition is massive. Homes are selling in two weeks or less in expensive coastal metros like San Jose, Boston, Seattle and Washington D.C., and far more slowly in the South; New Orleans and Atlanta join Texas and Florida metros with the most relaxed pace of sales.  

January 2025 Market Report

Home values

• The typical U.S. home value is $356,776.
• The typical monthly mortgage payment, assuming 20% down, is $1,883.
• Home values climbed month over month in one of the 50 largest metro areas in January. Louisville saw the only gains (0.2%), San Jose held flat, and Las Vegas (-0.1%), Cincinnati (-0.1%), and Washington (-0.1%) saw the smallest declines.
• Home values fell, on a monthly basis, in 48 major metro areas. The largest monthly drops were in Buffalo (-1.1%), Tampa (-0.8%), Austin (-0.8%), Pittsburgh (-0.8%), and New Orleans (-0.7%).
• Home values are up from year-ago levels in 41 of the 50 largest metro areas. Annual price gains are highest in San Jose (8.1%), Providence (6.7%), Cleveland (6.6%), Hartford (6.3%), and New York (6%).
• Home values are down from year-ago levels in eight major metro areas. The largest drops were in Austin (-3.4%), Tampa (-2.8%), San Antonio (-1.8%), New Orleans (-1.1%), and Jacksonville (-0.9%).
• The typical mortgage payment is up 6% from last year and has increased by 115.4% since pre-pandemic.

Inventory and new listings

• New listings increased by 60.7% month over month in January.
• New listings increased by 11.5% this month compared to last year.
• New listings are 16.2% lower than pre-pandemic levels.
• Total inventory (the number of listings active at any time during the month) in January increased by 2.2% from last month.
• The median age of inventory, the typical time since the initial list date for active for-sale listings, was 79 days.
• There were 17.6% more listings active in January compared to last year.
• Inventory levels are 26% lower than pre-pandemic levels for the month.

Price cuts and share sold above list

• 22.8% of listings in January had a price cut. That’s compared to 17.2% in December and 20.8% in January of 2024. 
• 24.8% of homes sold above their list price in December. That’s compared to 27% the month prior and 26.3% in December of 2023. 

Newly pending sales

• Newly pending listings increased by 20.5% in January from the prior month.
• Newly pending listings decreased by 3.6% from last year.
• Median days to pending, the typical time since initial list date for homes that went under contract in a month, is at 38 days in January, up one day since last month.
• Median days to pending increased by nice days from last year.

Market heat index

• Zillow’s market heat index shows the nation is currently a neutral market.
• The strongest sellers markets in the country are San Jose, San Francisco, Hartford, Boston, and Buffalo.
• The strongest buyers markets in the country are Miami, New Orleans, Jacksonville, Tampa, and Memphis.