Mortgage rates are still hovering around 7% after hitting 8% in October. And that’s after home prices rose substantially during the pandemic-fueled housing boom. A typical homebuyer in October would have to shell out more than 40% of their earnings on their mortgage payment, Zillow reported earlier this month, the highest number in more than 30 years of data. 

Sellers are taking notice. While relatively few are selling their homes, with existing homes sales at a decade low, an unusual number of them need to cut prices to get a sale over the finish line, Zillow found. “Price cuts [are] still abnormally common as sellers respond to high rates,” Zillow’s November housing market report released on Monday said. 

Last month, 22.6% of listings posted a price drop—which is “unseasonably high,” the report found. That’s slightly lower than the 25% of listings with a price cut in October. But Zillow’s chief economist and author of the report, Skylar Olsen, suggested that real estate agents are likely reworking their “pricing strategies with pressure from higher mortgage rates weighing heavily on buyers.”

And that weight is substantial: The typical monthly payment has more than doubled from pre-pandemic levels, Olsen noted. For the median $347,000 U.S. home, assuming 20% down, that comes out to a $1,925 payment every month, by Zillow’s calculation—before even considering the cost of maintenance, utilities, or property taxes. “That is up 9% from last year and has increased by 120% since pre-pandemic,” Olsen wrote. 

‘Early holiday surprises’

That slight drop in price cuts from October to November is likely a result of mortgage rates having fallen after reaching a more than two decade high. Still, it’s clear that sellers are continuing to cut prices given that mortgage rates are still more than double what they were during most of the pandemic. Consider this home that was circling on X, formerly Twitter: a three-bedroom, three-bathroom, close to 1,300 square feet apartment in San Francisco. After being listed for sale in January of this year at $900,000, the sellers have cut their price four times. It’s now listed for $749,000 as of the end of November,  according to Zillow. To be sure, we don’t know the circumstances behind this specific situation, and not all homes that are listed will have such massive price cuts, if any at all.

However, aside from price cuts happening more than they typically do, prices are mostly negotiable too, the report said. Zillow isn’t the only one reporting price cuts; a Redfin note from early last month found nearly 7% of for-sale homes posted a price drop in the four weeks ending October 29, the highest share since Redfin started tracking this data in 2012.

Apart from price cuts, Zillow’s chief economist stressed that buyers are finding a bit of relief as home prices and mortgage rates ease—and inventory increases slightly with more homeowners giving up their golden handcuffs. New listings were almost 35% below pre-pandemic levels in April, but over the past few months that figure has fallen to 14%, shrinking the gap between current and pre-pandemic supply levels. 

“Home shoppers and sellers braving the wind and rain late in the year are getting some early holiday surprises,” Olsen wrote. “Monthly costs for a new mortgage are falling, inventory is trending closer to normal, and price cuts are uncharacteristically common,” she wrote.It’s important to note that year-over-year home values continue to climb, but in November, they fell month-over-month. Only two of the 50 largest metropolitan areas, Miami and Las Vegas, saw home values rise on a monthly basis. Values in the other 48 fell, with the greatest monthly drops in New Orleans, Austin, San Antonio, Minneapolis, and San Francisco. Zillow’s economists also predict that home values nationwide will fall 0.2% next year.