Home Sales Edge Higher as Mortgage Rates Pressure Market

US existing home sales increased in September as buyers faced higher mortgage rates, with the National Association of Realtors reporting a seasonally adjusted annual rate of 3.99 million sales after a 1.5% monthly rise. The market remained near its lowest levels of 2026 as affordability pressures limited demand.

According to the National Association of Realtors, September sales were 2.2% lower than a year earlier. The group reported 1.6 million homes available for sale, the highest inventory level since November 2019, giving buyers more negotiating power.

Mortgage rates climbed during September, moving from below 7% at the start of the month to around 7.5% by the end, although many completed sales reflected contracts signed in August when rates were lower.

National Association of Realtors chief economist Lawrence Yun described the conditions facing buyers and sellers.

"It is a very tough market out there, especially with mortgage rates rising," Lawrence Yun, chief economist at the National Association of Realtors, said.

Pending home sales also weakened, with Redfin reporting a 4% monthly decline in September, the largest monthly drop in more than three years. The weekly average mortgage rate reached 7.28% at the end of the month, the highest level in three years.

Chen Zhao, Redfin's head of economic research, said higher rates reduced affordability while creating more room for negotiation for some buyers.

"It's not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them. 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.

Slow sales also mean prices may flatten or fall in the not-so-distant future. Sellers should remember that while many house hunters have pulled back, there are some people who need to move and are still buying homes. 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.", Chen Zhao, head of economic research at Redfin, said.

Redfin's report also showed that canceled purchase agreements reached 14.5% nationally in September, the highest share in its records. Zhao separately highlighted how buyers have gained leverage as listings remain available longer.

"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. Slow sales also mean prices may flatten or fall in the not-so-distant future.", Chen Zhao, head of economic research at Redfin, said.

The same report found cancellation rates varied widely by metro area, with Jacksonville, Florida, recording 19.9%, followed by Tampa at 18.8%, Las Vegas at 18.6%, San Antonio at 18.5%, and Phoenix at 18.4%.

"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.", Chen Zhao, head of economic research at Redfin, said.

Pending sales declined across all 50 largest US metropolitan areas, according to Redfin, while annual home price growth slowed to 1.3% and about three in five homes sold below their original asking price.