Mortgage costs have drifted back into roughly 7% territory, near a peak not seen in almost three years. Redfin ties that and sticky inflation to shrinking affordability, and it counted pending sales dropping to 316,652 in September, the weakest level in 12 years.
That figure sits only a bit higher than the April 2020 pandemic trough of 299,829. Redfin also said every one of the 50 largest metros posted a decline in sales, something last seen when rates hovered around 7% in September 2023.
Redfin tracks pendings differently than the National Association of Realtors. NAR most recently reported almost a 5% year-over-year dip in August, with September numbers due next week.
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More buyers are walking away. Redfin found 14.5% of home sales were canceled in September, the highest share since the early pandemic period of March to April 2020. On the supply side, sellers look a bit sturdier this year as some pent-up demand is finally coming to market, with the number of homes for sale in September reaching its highest level since March 2020.
Pricing is losing momentum. The median asking price slipped 0.5% from August to September, aligning with other recent industry reads pointing to slower home price growth throughout 2026.
Chen Zhao, who leads economic research at Redfin, said it is "not surprising" that home sales are sagging as borrowing costs peak and affordability gets squeezed, but she still sees "silver linings" for both sides. For buyers, "less competition means more room to negotiate" on price and concessions, and "slow sales also mean prices may flatten or fall in the not-so-distant future."
For sellers, Zhao noted that "while many house hunters have pulled back, there are some people who need to move and are still buying homes." Her advice: "My best advice for sellers in this environment is to price realistically from the start and lean into any flexibility you can offer; a rate buydown or covering closing costs can go a long way when buyers are stretched thin."
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