TAMPA, Fla. (WFLA) — Amid rising interest rates and a growing number of homes on the market, home sellers across the United States are feeling increased pressure to reduce prices to attract potential buyers.

Realtor.com reported that the percentage of homes experiencing price reductions surged to 34.2% in May 2024, with properties spending an average of 44 days on the market. This marks a significant shift in the housing market dynamics compared to previous years.

“With greater inventory and a slower time on market, it is possible that price growth might continue to decelerate further until the market sees a meaningful decline in mortgage rates,” stated Sabrina Speianu, Realtor.com economic data manager. Speianu’s analysis highlights the correlation between rising inventory levels and extended market times with the deceleration in home price growth.

According to Realtor.com, the percentage of homes that have dropped their prices increased from 12.7% in May 2023 to 16.6% in May 2024. This upward trend in price reductions reflects the broader market adjustments as sellers react to changing economic conditions.

The report also revealed that 46 of the top 50 metropolitan areas in the United States experienced an increase in the share of price reductions compared to the previous year. This widespread trend indicates that the phenomenon is not isolated to specific regions but is part of a national shift in the housing market.

Regionally, the South saw the highest percentage increase in price reductions year over year, with a rise of 4.9 percentage points. The West followed with an increase of 3.3 percentage points, the Midwest saw a rise of 2.2 points, and the Northeast experienced a 1.2-point increase. These regional variations provide insight into how different parts of the country are experiencing and reacting to the broader market trends.

While the current market conditions are putting pressure on home sellers, they may offer some relief to home buyers who have faced rapidly rising prices in the post-pandemic real estate boom. The increased availability of homes and reduced prices could provide more opportunities for buyers to find properties within their budget.

Realtor.com highlighted three cities with significant price drops: Tampa, Florida; Jacksonville, Florida; and Charlotte, North Carolina. These cities have seen notable changes in their real estate markets, making them focal points for buyers looking for deals.

In Tampa, 28.6% of homes saw price reductions in May 2024, representing a substantial increase of 10.9 percentage points compared to the previous year. One notable example includes a four-bedroom, solar-powered house that reduced its price by $55,000. This significant price cut underscores the lengths to which sellers are going to attract buyers in a competitive market.

Jacksonville followed closely, with 27.3% of homes reducing prices, reflecting a 10.2 percentage point increase. The city's market adjustments indicate a similar trend of sellers needing to lower prices to close deals.

Charlotte came in third, with 19.4% of homes lowering their prices, marking an 8.3 percentage point increase. The price reductions in Charlotte demonstrate that even cities with robust real estate markets are not immune to the pressures of rising interest rates and increased inventory.

The report's findings underscore the shifting landscape of the U.S. housing market. With sellers adjusting their strategies to accommodate a more competitive and price-sensitive market, potential buyers may find new opportunities that were previously unavailable. However, the long-term effects of these changes will depend on future economic conditions, particularly trends in mortgage rates and overall housing demand.