Key takeaways
Powered by lumidawealth.com
- Buyers are getting the biggest discounts in years: nearly two-thirds of homes sold below list price, with ~8% average discounts on those deals.
- Negotiating power is shifting because high mortgage rates and prices have sidelined many would-be buyers, leaving fewer active bidders.
- The Trump administration argues deportations will reduce housing costs, but analysts see limited evidence and say other drivers dominate rent dynamics.
- For investors, the setup points to slower price momentum, more regional dispersion, and continued sensitivity to rates and household affordability.
What Happened?
Home buyers are seeing unusually favorable terms. Nearly two-thirds of buyers purchased below the original list price last year, the highest share since 2019, and homes that sold under list price averaged roughly an 8% discount—the largest since 2012. Buyers are also securing cash concessions as demand remains depressed and overall home sales sit near multi-decade lows. Separately, the Trump administration has promoted deportations as a lever to reduce housing costs, but current data doesn’t clearly support a direct causal link.
Why It Matters?
This is a notable pivot in bargaining power after years of seller-favorable conditions. A sustained discounting environment typically signals demand elasticity: buyers are price- and payment-sensitive, and sellers are increasingly forced to meet the market. For housing-linked equities and credit, the critical variable remains the cost of capital—rates shape affordability, transaction volume, and construction economics. Policy narratives around deportations may affect sentiment, but the near-term path for home prices and rents is more likely driven by mortgage rates, supply availability, household formation, and local job conditions.
What’s Next?
Watch whether discounts broaden beyond specific markets into a national trend, and whether concessions become more standardized (rate buydowns, closing credits, repair allowances). The key swing factor is interest rates: any meaningful decline could revive demand quickly and compress discounts, while higher-for-longer would reinforce buyer leverage and slower price appreciation. For rents, focus on city-level supply pipelines and migration patterns rather than headline policy claims, since the evidence for deportations as a primary driver remains unclear.
