Existing-home sales remain near their slowest pace of the year even after a modest monthly rise, as mortgage rates near 7 percent keep locking ordinary American families out of the market.
The National Association of Realtors reported that existing-home sales ticked up 1.5 percent from August to a seasonally adjusted annual rate of 3.99 million in September. That small gain still left sales 2.2 percent lower than a year earlier, and the two months ranked as the slowest of the year so far.
High mortgage rates remain the central barrier. Freddie Mac data showed the average 30-year fixed rate reached 6.86 percent in September, up from 6.67 percent in August and 6.35 percent a year earlier. Rates have climbed further in recent weeks, and that climb is pricing more would-be buyers out of the market entirely.
NAR chief economist Lawrence Yun put the squeeze in plain terms after the latest report.
"Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home."
Yun also noted that August and September marked the two slowest months for home sales this year despite the seasonally adjusted monthly bump. Higher inventory and longer days on market are giving remaining buyers more room to negotiate, but that does little for families who cannot clear the monthly payment hurdle in the first place.
The same rate pressure has shown up in earlier sales data that already pointed to a stalled national market, including existing-home sales sliding to their slowest pace under elevated borrowing costs.
Homes available for sale climbed 4.6 percent from a year earlier to 1.6 million, leaving a 4.8-month supply compared with 4.5 months the prior year. The median existing-home price still rose 1.3 percent annually to $417,500, extending a streak of year-over-year price gains to 39 consecutive months.
Sellers who locked in lower rates years ago have little incentive to move and take on a far higher payment. That lock-in effect keeps listings from flooding the market even as demand softens, and it leaves prices sticky while volume stays depressed.
Daily Mail reporting on the NAR figures, along with fresh numbers from Zillow and Redfin, shows the slowdown running through every major metric buyers and sellers watch.
Zillow data provided for the report showed newly pending home sales down 8.5 percent year over year in September. Completed existing-home sales fell 2.5 percent from a year earlier to 319,346 and dropped 5.6 percent from August. The typical U.S. home value sat at $366,913, only 1 percent higher than a year earlier, while the monthly mortgage payment on a typical home reached $1,922 assuming a 20 percent down payment and excluding taxes and insurance, 6.7 percent higher than the year before.
That payment gap is exactly why many households on the edge are walking away. Zillow chief economist Mischa Fisher said the rental side of the market is holding more appeal than many expected.
"Buyers on the margins are finding the monthly savings for renting too good to pass up, even if their long-run goal is still to purchase a home."
Typical U.S. rent rose 2.7 percent annually to $1,932, the biggest year-over-year increase since April. Fisher said Zillow expects home sales to stay below year-earlier levels through the fourth quarter unless mortgage rates drop quickly enough to pull both buyers and sellers back into the market.
Regional pockets sometimes defy the national stall, as seen when New Jersey real estate keeps climbing even while broader sales remain stuck.
Redfin’s numbers painted an even sharper picture of stalled contracts. Pending home sales fell 4 percent from August to September on a seasonally adjusted basis, the biggest monthly decline in more than three years. The number of homes going under contract sat at its lowest level since spring 2014, excluding the pandemic freeze in April 2020.
Pending sales dropped year over year in every major U.S. metropolitan area. Seattle led the decline at 24.4 percent, followed by Los Angeles at 16 percent and San Diego at 15.8 percent. Completed home sales fell 1.6 percent month over month to the lowest level since the end of 2023. Total supply of homes for sale reached its highest mark since March 2020.
Perhaps most telling, 14.5 percent of homebuying deals fell through in September, the highest share in Redfin’s records. When rates push monthly costs beyond what buyers can carry, contracts unravel late in the process and both sides lose time and money.
Similar rate pressure has kept buyers on the sidelines in the new-construction segment as well, where new home sales edged up only modestly while borrowing costs stayed elevated.
Redfin’s head of economic research, Chen Zhao, said the pattern is straightforward once rates move above 7 percent.
"It's not surprising that when rates climb above 7 percent, fewer people buy homes because fewer people can afford them."
Zhao added that the slowdown does create negotiating room for the buyers who remain.
"But dig a little deeper, and there's a silver lining on both sides. For buyers, less competition means more room to negotiate: on price, on closing costs, on repairs, and sometimes sellers even pay for a mortgage-rate buydown."
His advice to sellers was blunt: price realistically from the start and offer flexibility, because a rate buydown or help with closing costs can decide whether a stretched buyer can close.
Zillow figures showed 27.4 percent of listings carried a price cut in September, up from 26.2 percent a year earlier and 26.3 percent in August. Homes took a median of 29 days to go under contract, two days longer than both the prior month and the year-earlier period.
More supply, longer marketing times, and a rising share of discounted listings all point to a market that has shifted away from the frantic bidding of prior years. Yet the median sale price has still not cracked lower on a year-over-year basis. That combination leaves many entry-level and move-up buyers stuck between payments they cannot afford and sellers who will not meet them halfway on price.
Luxury corners of the market sometimes tell a different story, with Miami leading the nation in ultra-high-end sales as wealthier buyers relocate. Most working families do not have that option.
Homeowners who stay put are also changing how they spend. Many are scaling back large renovations and focusing on smaller fixes, a pattern visible when Home Depot sales grow on smaller projects while bigger housing costs remain stubborn.
Yun warned that sellers may need to offer price discounts and other incentives if they want to attract qualified buyers in this rate environment. Higher inventory and longer days on market already give those buyers leverage. The open question is how many households can still qualify at all while the 30-year rate hovers near 7 percent and monthly payments keep rising faster than wages for many workers.
The September data leave little room for spin. Sales volume is weak, pending contracts are falling, deals are collapsing at a record rate, and the families who most need an affordable path to ownership are the ones locked out. Until mortgage rates ease in a sustained way, the housing market will keep rationing opportunity by monthly payment size rather than by work ethic or savings discipline, and that is a failure ordinary buyers feel every time they run the numbers and walk away.