• Bidding wars have likely peaked for the year, and price cuts are rising. That indicates we have passed peak home shopping season and are settling into the cooler fall and winter seasons. 
• Some Southern markets are seeing the least buyer competition, possibly presenting an opportunity for home shoppers after many of the same markets were red hot throughout the pandemic. 
• Many markets in the Midwest and Northeast continue to show the most resilience to changing market conditions. 

Recent movements in the share of homes sold above their list price and the number of for-sale listings with a price cut reveal we have passed this year’s peak competition in the housing market. Buyers who have room in their budget to manage higher mortgage rates may have an opportunity this fall and winter. 

Nationally, the share of homes sold above list peaked in late June at 41.9%, and has declined each week since. In the most recent reading the week ending August 19, 37.6% of homes sold across the U.S. fetched more than the list price. However – that’s still a much larger share than in August of 2019, when less than a quarter of homes sold above list. 

An above-list sale indicates a bidding war among multiple home shoppers that drives up the final sale price. Fewer homes being sold above list means buyers are gaining negotiating power. 

Buyers in New Orleans (13.6% of homes sold above list the week ending August 19), Miami (16.3%), Tampa (18.2%), Austin (18.3%), Jacksonville (18.4%) and San Antonio (20%) can expect the fewest bidding wars. It’s possible that strong new construction figures in these Southern markets are reducing competition for existing homes. New homes are an especially attractive alternative in today’s high-interest-rate environment because builders often have flexibility to offer incentives like interest rate buydowns to help buyers make the finances work. 

Many of the markets where home buyers are most often engaging in bidding wars are in the Midwest and Northeast: Buffalo (80.9% of homes sold above list the week ending August 19), Providence (69.6%), Milwaukee (68.6%), San Jose (63.5%), San Francisco (62.4%) and Boston (60.7%) lead the way. 

Whether from sellers with inflated expectations after the frenzied market of 2020 and 2021, or buyers pulling back — perhaps due to mortgage rate movements — sellers cutting their list price is another indicator of a cooling housing market. 

It’s common to see more price cuts after Labor Day as sellers often see that as a transition point between the busy season and the slower period, and reset their expectations accordingly. That has certainly played out this year. 

From mid-April through early-June, somewhere between 7% and 8.1% of for-sale listings saw a price cut in a given week. That streak was broken during the week ending July 15, when 8.8% of listings saw a price cut. The share of listings with a price cut has since risen further to 9.2% the week ending September 23.

Buyers will see the most price cuts in Indianapolis (16% of listings cut their price the week ending September 23), Salt Lake City (15.4%), Raleigh (13.7%), Tampa (13.6%) and Denver (13.4%). The markets with the fewest price cuts are the New York metro area (4.8% of listings cut their price the week ending September 23), Miami (6.9%) and Los Angeles (7.1%). 

For a closer look at what’s in store for buyers and sellers this fall, head to Zillow’s fall housing market outlook.