Every year, the real estate market experiences a year-end homebuying “holiday freeze,” that begins on Veteran’s Day and ends about two weeks after the first of the year.
During this time, everything slows down. Agents, vendors, mortgage and title providers have less availability at the same time those who must close are scurrying to get the transaction done before the end of the year. The 2026 “holiday freeze” may be the best time in years for buyers to get great deals, which can often offset the cost of a higher mortgage interest rate.
The numbers that matter
According to the September report from Realtor.com, there are more than 1.16 million homes on the market and 20.8 percent of active listings have had at least one price reduction. The sellers most likely to be on the market at year-end include those whose buyers have locked in a lower mortgage rate, who are making a job-related relocation, are involved in a 1031 tax-deferred exchange, or are desperate to escape their current personal or financial living situation.
How to capitalize on year-end homebuying before the ‘holiday freeze’
Know that price reductions signal intent
Small, successive price reductions often signal a seller still trying to hang on to their current listing price. In contrast, larger percentage cuts, especially after a long time on the market, usually signal a seller who is ready to negotiate credits, repairs or a flexible closing period, etc. To locate these properties:
Pull the full listing history on any property that has already had a reduction or has been on the market more than 60 days. Note the original list price, the size of each reduction as a percentage and whether the property has been withdrawn or expired and relisted. You’re searching for the sellers making the most aggressive price reductions or other concessions
Look for listings that have concessions listed on the MLS
In addition to price reductions, motivated sellers will also list the types of concessions they’re willing to make, which can include a “3-2-1 mortgage interest buy-down,” inclusion of a home warranty policy, flexible closing dates, etc. In really tough luxury markets, I’ve seen people even offer luxury vehicles.
Have a plan for when the property needs a price reduction
If the current list price is no longer generating showings, the first step is to obtain a price reduction along with any other concessions you can negotiate with your seller. Using the current rate of absorption has been a proven tactic that has worked for decades. Here’s what to do:
- Add up all the current listings on the market this month plus those that sold, expired or were canceled. Assume that total number is 60.
- Next, calculate how many properties went under contract during a given number of months. Let’s assume 45 properties have gone under contract or closed in the past 90 days (three months). Divide 45 properties by the number of months (3). That gives you the number of properties selling on average each month, which would be 15.
- With 60 properties currently on the market, you would divide the number of properties selling per month by the total number of on-market properties (15/60 or 25 percent. The script below works like a charm and is sometimes called “the Probability of Selling.” It is also an excellent way to obtain price reductions.
“Seller, there are currently 60 active listings in your market. Only 15 of them went under contract this month. What that means is that the probability of your house selling next month is 15 out of 60, or 25 percent. The probability your house will NOT sell next month and you will be listed next month is 75 percent. To sell in today’s market, you must be in the top 25 percent of the most competitive properties in terms of price, condition and terms.”
Calculate the cost of not selling
Many sellers don’t realize the true costs of their home. Before you write an offer or have a conversation about a price reduction, calculate how much it costs for the sellers to live in the property each month. Include interest on the existing mortgage or home-equity line, property taxes, insurance, utilities and any association dues. (Do not include principal reductions on the mortgage payment, since they reduce the loan balance.)
To illustrate this point, assume the owner’s monthly costs are $2,000 in mortgage interest, $300 for property taxes, $200 for homeowner’s insurance, $450 for utilities (if you can access them) and HOA fees of $350. The total cost of staying in the property each month it doesn’t sell is $3,300.
If they don’t sell for another 90 days and it takes 60 days to close, that’s $16,500. You can use that number to make the argument about reducing their price by $10,000 or more to get the property sold now.
Mortgage interest rates are not coming down (and may even be going up)
While New York Federal Reserve President John Williams said he doesn’t see additional rate hikes in 2027 after one more increase this year, Fed funds future traders are signaling something quite different.
“Eight of the 18 who gave a rate forecast for 2027 see one more increase after an additional hike this year,” he said.
READ: Buyers waiting for lower rates? Here are the scripts you need now
The bottom line
The weeks before the 2026 holiday freeze may be your best opportunity to get your current sellers and buyers under contract now. Inventory is higher than a year ago, a larger share of listings already have price reductions, and rates have increased and may even go higher. This combination creates more negotiating room for prepared buyers and more pressure on sellers who need to sell now.
Bernice Ross is president and CEO of BrokerageUP and RealEstateCoach.com, the founder of Profit.RealEstate and a national speaker, author and trainer with over 1,500 published articles.
