More than a third of home sellers dropped their asking prices in February, the highest share for the month since Redfin’s records began in 2012, as buyers remain hesitant amid high mortgage rates and alarming economic indicators.

A report published Thursday by Redfin reveals that 34.2% of February home sellers reduced their list prices, up from 31.5% during the same period last year. For the sellers who made reductions, the average price cut was $40,915, or 7.3%, which is the highest percentage for the month since 2023.

When factoring in all February home sellers — not just those who made cuts — the average price reduction sat at $13,463, which represents a 2.4% drop.

The surge in price cuts illustrates a shifting landscape where housing supply is increasingly outpacing buyer demand. Prospective buyers have been sidelined by elevated home prices, high mortgage rates and broader economic concerns. This dynamic has handed significant negotiating power to buyers, who now have hundreds of thousands of additional options to choose from compared to the seller’s market of recent years.

A seller’s likelihood of dropping their asking price is correlated with how long they have owned the property. According to the report, 37.4% of sellers who have lived in their homes for two years or less had to lower their price, compared to just 31.8% of those who have owned their homes for at least seven years.

Many recent buyers purchased during the pandemic’s market peak and are now listing high to avoid going underwater, only to find they must adjust to cooling market conditions, Redfin noted.

Geographically, conditions vary greatly by locality, with the trend most pronounced in the Sun Belt. Texas and Florida dominate the list of major metro areas with the highest share of price reductions, largely because builders have added significant new housing supply in these states, boosting buyer bargaining power.

In San Antonio, a leading 57.9% of February sellers lowered their prices, followed closely by Austin at 55.2% and Dallas at 47.3%. Florida sellers face additional pressures from intensifying natural disasters, surging insurance premiums and rising condo homeowners insurance fees, which are prompting some homeowners to exit the market.

At the other end of the spectrum, only 7.4% of sellers in San Francisco dropped their prices. Redfin attributes this dynamic to sellers in the Bay Area being “known for underpricing their homes to fuel bidding wars.”

Despite the challenging winter environment, sellers holding out for the spring market may fare better. Historically, homes that close in the spring are the least likely to see price reductions, with May recording the lowest share of cuts in six of the past 10 years, according to Redfin.

Recognizing this seasonal advantage, nearly 45,000 U.S. homes that were delisted last year reentered the market in January as sellers bet on stronger spring demand.

“A lot of people who couldn’t sell their homes last year opted to delist instead of reducing the price, with a plan to relist this spring because they knew that would give them a better chance of selling,” commented Boston-based Redfin Premier agent Aditi Jain in the report.

Furthermore, the 34.2% headline figure for February price cuts may actually undercount the true scope of reductions. The analysis does not include price cuts made prior to a home being delisted and subsequently relisted.