Fewer American families signed contracts to buy homes in September than at any time since spring 2014, except for the brief freeze when the pandemic began. The drop happened as the weekly average mortgage rate climbed above 7 percent and reached 7.28 percent by the end of the month. Buyers stepped back while more homes sat on the market. The shift has given remaining buyers more room to talk terms, yet many sellers still face longer waits and more canceled deals.
The September Numbers from Redfin
Redfin reported that pending home sales fell 4 percent from August on a seasonally adjusted basis. That was the biggest one-month drop in more than three years. The count of homes that went under contract stood at the lowest level since spring 2014, aside from April 2020. The decline hit every one of the 50 largest metro areas for the first time in three years. The last time the same pattern appeared was September 2023, when rates also stayed above 7 percent for a stretch.
Seattle saw the sharpest year-over-year fall in pending sales at 24.4 percent. Los Angeles dropped 16 percent, San Diego 15.8 percent, and Anaheim 15.5 percent. Smaller declines showed up in places such as Montgomery County, Pennsylvania (1.6 percent), Pittsburgh (2.1 percent), and West Palm Beach, Florida (2.2 percent). Closed sales also slipped 1.6 percent from the prior month and reached their lowest point since the end of 2023. Most of those closed deals had gone under contract earlier, when rates were already rising.
Chen Zhao, Redfin’s head of economic research, put the core point simply: “It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them.” She added that the same slowdown carries a silver lining for those still in the market. Less competition leaves more room to negotiate on price, closing costs, repairs, and even rate buydowns. Slow sales, she noted, also raise the chance that prices flatten or fall in the months ahead. Sellers who still need to move, she said, do better when they price realistically from the start and offer flexibility.
Why Rates Above 7 Percent Changed the Math
The weekly average 30-year mortgage rate reached 7.28 percent at the end of September, the highest in three years. Later readings moved still higher, near 7.40 percent in early October. Higher rates raise the monthly payment on the same house. A family that could stretch for a payment at 6.5 percent often cannot do the same at 7.3 percent without cutting other spending or lowering the price they offer. Many simply wait.
Redfin data show the effect was nationwide. Pending sales fell in every major metro. On the West Coast, high home prices and recent job cuts in tech made the payment jump even harder to absorb. In Florida and other Sun Belt markets, rapid price gains in prior years left fewer buyers able to qualify once rates rose. The pattern matches earlier periods when rates crossed 7 percent. Demand pulled back, inventory built, and the share of deals that fell apart increased.
Some market watchers point to the Federal Reserve’s September rate increase and the rise in longer-term bond yields as the immediate drivers. Others note that home prices remain elevated relative to incomes in many large cities. A separate look at costs in Miami and Los Angeles showed monthly housing outlays for owners with mortgages equal to roughly half of median household income in those metros. When the payment share is that large, even a small rate move can push many households out of the purchase decision.
Inventory Up, Cancellations at a Record Share
The total number of homes for sale rose 1.2 percent from August and reached its highest level since March 2020. New listings ticked up slightly. More supply and fewer signed contracts shifted the balance. Redfin called the result the strongest buyer’s market in its records. That shift appears in the cancellation numbers. 14.5 percent of deals that went under contract in September later fell through. That share is the highest in Redfin’s data outside the early pandemic months.
The highest cancellation rates appeared in Jacksonville (19.9 percent), Tampa (18.8 percent), and Las Vegas (18.6 percent). Lower rates showed up in tighter markets such as San Francisco (2.8 percent). Buyers who remain active can walk away after inspection or when a better option appears. Sellers who listed at prices set during stronger demand now face more price cuts. Nearly one in five active listings (19.8 percent) saw a price reduction in September. The share of homes that sold below their original asking price reached 60.5 percent.
Median sale price still rose, but only 1.3 percent from a year earlier to $393,895. That was the smallest yearly gain since February. The median asking price rose just 0.6 percent year over year. Price growth has cooled, yet it has not reversed on a national basis. Some metros still show gains. San Francisco posted a 14.6 percent year-over-year rise in sale prices. Cleveland and St. Louis also recorded solid increases. Other places saw declines. Seattle prices fell 4.4 percent, San Jose 3.4 percent, and Denver 2.6 percent.
What the Slowdown Means for Buyers and Sellers
Buyers who can still qualify now face less competition. Redfin agents note that sellers are more willing to cover closing costs, fix items found in inspection, or contribute to a rate buydown. Homes stay on the market longer in many areas, which gives buyers time to compare options. The same conditions that reduce the number of offers also raise the chance that a buyer can negotiate a lower final price.
Sellers face a different set of choices. Brian Connelly, a Redfin Premier agent in Boston, described the change from the last decade: “For the last decade, there was almost a certainty that if you listed a home, it would sell—and it would usually sell quickly, with multiple offers. Now, the calculus has changed.” He advises pricing slightly below nearby comparable sales and preparing the home carefully so nothing gives a buyer a reason to hesitate. Homes that linger often see price cuts later, which can create a weaker impression.
Zhao’s advice to sellers is practical: price realistically at the start and offer flexibility where possible. A rate buydown or help with closing costs can matter when monthly payments already stretch family budgets. Some sellers who do not need to move have chosen to wait. Others list and then pull the home if offers do not appear at the hoped-for price. Both choices add to the inventory that remains available.
Regional Patterns and the Broader Picture
Coastal and higher-priced markets showed the largest pullbacks in pending sales. West Coast metros with expensive homes and recent tech-sector job losses felt the rate increase most sharply. Southern California markets ranked among the steepest declines. Florida metros posted some of the highest cancellation rates, consistent with the large price gains those areas saw in prior years. Smaller declines appeared in parts of the Northeast and Midwest where prices are lower relative to local incomes.
Earlier data from the National Association of Realtors showed existing-home sales in September at a 3.99 million annual pace, up 1.5 percent from August but still below the prior year. Those closed sales largely reflected contracts signed when rates were lower. Pending sales are a leading indicator, so the September drop points to weaker closings in the months ahead. A related look at August sales appeared earlier on this site: US Existing Home Sales Hit 14-Month Low as Mortgage Rates Climb.
Supply has risen from the very tight levels of recent years, yet it remains below pre-pandemic norms in some measures. Months of supply sits in a range that many analysts describe as closer to balanced than the strong seller’s market of 2021–2022. The combination of higher rates, elevated prices, and more available homes has reduced the urgency that once drove multiple offers on almost every listing.
Outlook and Open Questions
Zhao noted that slow sales raise the chance prices flatten or fall. How far any decline goes depends on whether rates stay elevated, whether more sellers decide to list, and whether job markets remain steady. Some buyers who paused in September may return if rates ease even modestly. Others will wait for clearer signs that prices have adjusted to the new payment levels. Sellers who price with current rates in mind and prepare homes carefully still complete sales, though often with fewer offers and more negotiation.
The record share of canceled contracts shows that buyers who do make offers retain more ability to walk away. That power can lead to better terms for those who stay in the market. It can also lengthen the time a home sits unsold and force later price reductions. Both sides of the market now operate with different constraints than they faced when rates were near historic lows. The September data mark a clear shift in that balance.
Sources and Further Reading
The main figures come from Redfin’s September 2026 pending home sales report, released October 12, 2026. The full announcement is available here: U.S. Pending Home Sales Sink Near 12-Year Low. Additional coverage and metro tables appear in contemporaneous reports from industry outlets that cite the same Redfin data.
Related reading on this site includes the earlier report on August existing-home sales linked above. Readers can also compare these contract numbers with the National Association of Realtors monthly existing-home sales releases for closed transactions.
Original source: Redfin report via PR Newswire, October 12, 2026. Full link: https://www.prnewswire.com/news-releases/us-pending-home-sales-sink-near-12-year-low-302905207.html
Disclaimer: This summary draws directly from Redfin’s published September 2026 figures and statements by its head of economic research. Redfin is a real estate brokerage that collects transaction data from its platform and public records. The numbers reflect seasonally adjusted pending sales and related market indicators as of the report date. Readers should consult the original release for full methodology and any subsequent revisions.