Record 37% of Builders Cut Prices as Housing Market Shifts

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News Flash

Builders Slash Prices at Record Levels as Market Cools

The discount signs are multiplying at new home communities nationwide. A record 37% of homebuilders cut prices in June 2025, the highest percentage since tracking began in 2022. That's up from 34% in May and 29% in April.

Builders aren't just trimming prices slightly. The average reduction holds steady at 5%, and 62% of builders are sweetening deals with additional sales incentives to lure hesitant buyers.

This wave of price cuts comes as the housing market shows conflicting signals. The median home sale price actually hit a new record of $396,500 during mid-June, but don't expect that ceiling to hold for long.

The real story? Inventory is climbing, giving buyers more options and negotiating power. The typical sale now comes in about $26,000 below asking price. Most forecasts suggest home prices will begin declining before year-end, potentially dropping 1% year-over-year by December.

And Zillow Predicts a Dip in Home Prices, but an Uptick in Sales in 2025

Zillow's crystal ball shows an interesting paradox for the housing market: falling prices but rising sales. The real estate giant's latest forecast projects a 1.4% decrease in home values while predicting existing home sales will climb to 4.14 million transactions—a 1.9% increase compared to 2024.

What's driving this seemingly contradictory forecast? In a word: inventory.

More homes hitting the market means less frantic competition among buyers, naturally cooling those record-setting prices we've seen. The median sale price recently peaked at $396,500 during the four weeks ending June 15.

But that same inventory surge creates more opportunities for transactions. More choices mean more buyers can finally find something that works for them, even if at slightly lower price points.

Redfin's analysts have reached similar conclusions, also projecting a 1% year-over-year decline in home prices by the end of 2025. The days of desperate buyers accepting any price tag appear to be waning.

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More You Should Know

• Mortgage Rates Remain Elevated: Despite the Federal Reserve maintaining its wait-and-see approach, the national average 30-year fixed mortgage rate climbed to 6.83% on June 23, 2025, remaining near multi-year highs amidst economic uncertainty. [Source]

• CRE Market Optimism Grows: Commercial real estate professionals anticipate a significantly improved market in 2025, with over 68% expecting better conditions, particularly regarding more accessible and less expensive capital. [Source]

• MetLife: CRE Values Growing: MetLife Investment Management anticipates an optimistic commercial real estate recovery, forecasting value growth of 4.5% in self-storage, 4% in retail, and 2.0% in other sectors over the next 12 months, driven by potential improvements in interest rate conditions. [Source]

• Real Estate Revenue Outlook Rises: Global real estate executives are overwhelmingly optimistic for 2025, with 88% anticipating revenue increases, a significant shift from previous declines, as the industrial sector remains strong while office vacancies pose ongoing challenges. [Source]

• Section 8 Funding Woes Loom: Public Housing Authorities anticipate significant challenges in 2025 as federal appropriations are expected to underfund the Housing Choice Voucher program, potentially leading to the loss of tens of thousands of existing housing vouchers. [Source]

• Home Prices Hit New Record: The median U.S. home sale price recently reached a record high of nearly $400,000, even as growing inventory allows buyers to negotiate an average of $26,000 below asking prices, indicating a shift in market dynamics. [Source]

• Rental Market Slows: Despite typical asking rents reaching $2,049 in May, the rental market is showing signs of cooling with slower growth, increased inventory, and more landlords offering concessions. [Source]

• PropTech's AI Boom: The PropTech market, projected to reach $122 billion by 2034, is experiencing significant investment in AI-powered solutions to improve building data management, operational efficiencies, and tenant experiences. [Source]

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