According to a recent analysis by Zillow, the cooling in the real estate market during the holiday season is already beginning to be felt, and home sellers are showing caution in the face of increased affordability.

According to Kara Ng, Senior Economist at Zillow, "affordability continues to be a hurdle for homebuyers, but 2025 brought real progress," she commented. Despite an unusually active fall, winter home prices are showing signs of slowing, returning to normal levels after reaching record highs. According to Ng, "mortgage payments dropped by more than $100 a month, while incomes continued to rise. For many households, that small change can make the difference between staying out of the market and finally being able to buy or sell a home," she said. Many homebuyers had stayed out of the market not only because of high prices but also because of high mortgage rates. “Although both sellers and buyers took a step back in November, reminding us that seasonality still matters, we expect the market to pick up some steam next spring,” the economist said. The Zillow report highlighted that during September and October, buyers and sellers were more active than usual due to low mortgage rates, but seasonality returned in the latter months of the year. Therefore, homeowners who have been waiting to buy are now deciding to wait through the winter to enter the market. Finally, Zillow indicated that in November sellers lowered prices by almost 26%, and they expect prices to be cut further during the spring to attract more buyers. Pending sales, meanwhile, remained stable for the last quarter, falling 18% month-over-month.