Homeowners at Increased Risk of Selling Homes at a Loss

Nearly 6% of people currently selling homes in the US could sell at a loss
June 25, 2025
2 min read
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Weakened demand from buyers is causing sellers to reduce prices and sell their homes at a loss.
Weakened demand from buyers is causing sellers to reduce prices and sell their homes at a loss.

As the market continues to shift in favor of buyers, an increased share of homeowners risk selling for less than they initially purchased their homes. According to data from real estate marketing platform Redfin, almost 6% of people currently selling homes in the U.S. may end up selling for less than they paid, an increase from the 4.4% recorded during the same time last year, though still lower than before the pandemic. However, if home prices drop by just 1%, the percentage of sellers at risk of a loss would rise to 6.4%, and a 5% drop in home prices could push that figure to 10.1%.

The risk also shifts depending on when a home was purchased. Of those who purchased homes after the pandemic (mid-2022 or later), about 16.4% are at risk of losing money by selling now. That figure drops to 9% among those who bought during the pandemic (2020 and into early 2022), while only 1.8% of sellers who bought before the pandemic face that risk.

Current sellers who bought their home after mid-2022 may have overextended themselves, thinking that prices were going to keep rising at similar rates. Prices have kept ticking up since then, but at a slower pace—and now prices have started to fall in some parts of the country, especially in the Sun Belt. That means sellers are in a position where they may need to choose between accepting a lower price, or taking the home off the market.

- Asad Khan, Redfin senior economist

Losses vary by region

While homeowners are at risk of selling at a loss across the U.S., the share of those at risk varies depending on the city. Virtually zero sellers in Providence, R.I., for instance, are at risk of selling their home at a loss. However, in San Francisco, nearly 20% of sellers face that risk. In Austin, Texas, 47.5% of homes purchased after the onset of the pandemic are now at risk of selling at a loss—the highest rate for any major U.S. metro.

The housing market has steadily shifted in favor of homebuyers over the past year

  • Stale Home Listings Grow: As of December 2024, the number of homes that have sat on the market for 180 days or more had increased by 24.3% on a month-over-month basis.
  • Buyers Have a Leg Up in These Housing Markets: The nationwide housing market is favoring buyers, but this is especially the case in Southern cities, such as New Orleans, San Antonio, and Miami.

 

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