Buyers Pull Back as Pending Home Sales Hit a Near 12-Year Low

Fewer homes went under contract in September than in any month since spring 2014, with one exception. That exception was April 2020, when the pandemic brought the housing market to a standstill.

Redfin’s September report counted 316,652 pending sales, seasonally adjusted. For context, April 2014 came in at 314,664 and April 2020 at 299,829.

Mortgage rates are the big reason. Rates climbed above 7% by the end of September, and a lot of buyers stepped back. Redfin’s numbers on prices and supply are pointing the same way, and together they describe the strongest buyer’s market Redfin has on record.

Pending Sales Post Their Biggest Monthly Drop in Over Three Years

Pending sales count homes that went under contract, so they offer a real-time read on buyer demand. September’s numbers took a big hit. 

Here’s how pending sales moved in September:

• Down 4% from August, the biggest monthly drop in more than three years
• Down 8.6% from September 2025

Rising mortgage rates were the big driver behind the drop in pending sales, mainly due to its impact on the monthly housing payment. Here’s where rates stood:

• Weekly average mortgage rate at the end of September: 7.28%, the highest in three years
• Monthly average 30-year fixed rate for September: 6.86%, up 0.19 pts. from August and 0.51 pts. from September 2025

Closed sales dropped in September, too. The bulk of those deals went under contract in July or August, when rates were climbing and economic uncertainty kept a lot of buyers on the sidelines.

Here’s the closed sales picture:

• 282,433 homes sold, the lowest level since the end of 2023
• Down 1.6% from August
• Down 4.3% from September 2025

Redfin also tracks existing-home sales as a seasonally adjusted annual rate, which estimates the yearly total if September’s pace held for 12 months. It came in at 4,228,933, up 0.1% from August and down 1.5% from September 2025.

Every Major Metro Saw Fewer Pending Sales

Pending sales fell year over year in all 50 of the most populous U.S. metros. The last time that happened was September 2023, the last stretch when mortgage rates stayed above 7% for months.

West Coast markets took the biggest hits:

• Seattle: -24.4%
• Los Angeles: -16%
• San Diego: -15.8%
• Anaheim, CA: -15.5%

Southern California’s metros rank among the priciest in the country, so higher rates pushed a lot of on-the-fence buyers out. Seattle is expensive, too, and a bumpy local job market is cutting into demand.

The smallest declines were in these metros:

• Montgomery County, PA: -1.6%
• Pittsburgh: -2.1%
• West Palm Beach, FL: -2.2%

Closed sales rose in a few metros. These saw the biggest gains:

• Indianapolis: 3.2%
• Orlando, FL: 3%
• Nassau County, NY: 2.8%

These metros saw the biggest drops:

• Philadelphia: -13.8%
• Denver: -13.7%
• Detroit: -12.4%

Home Price Growth Is Losing Steam

Prices are rising at a slower clip. The median U.S. home-sale price rose 1.3% year over year to $393,895 in September, the smallest increase since February.

Other price data shows the same trend:

• The median asking price fell 0.5% from August
• Asking prices rose 0.6% from September 2025, the smallest annual increase since April
• 60.5% of homes sold for less than their original asking price
• About 3 in 5 homes have sold below asking for 18 months in a row
• The average sale-to-original-list-price ratio was 96.3%
• 19.8% of sellers with active listings cut their price
• The share of sellers cutting prices rose in 43 of the 50 most populous metros

Price changes varied a lot from one metro to the next. The biggest gains were in these markets:

• San Francisco: 14.6%
• Cleveland: 7.9%
• St. Louis: 6.7%

The biggest drops were in these markets:

• Seattle: -4.4%
• San Jose, CA: -3.4%
• Denver: -2.6%

Chen Zhao, Redfin’s head of economic research, pointed to a silver lining for buyers and sellers in the slowdown.

“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.”

Housing Supply Climbs to a Six-Year High

Homes are piling up on the market as sellers keep listing at a steady pace and buyers pull back. 

Months of supply tells you how long it would take to sell every listed home at the current sales pace. Here’s where supply stood in September:

• 1,510,784 homes for sale, the highest since March 2020
• Up 1.2% from August and 1.7% from September 2025
• 4.1 months of supply, up 0.1 pts. from August and 0.3 pts. from September 2025
• A median of 51 days on market, one day more than in August and in September 2025

New listings held steady. Redfin counted 381,191 new listings in September, up 0.3% from August and down 0.4% from September 2025.

Some homeowners are listing because they need to move. Others are uneasy about market conditions.

A Near-Record Share of Buyers Are Walking Away From Deals

More buyers are backing out of deals. In September, 14.5% of pending sales fell out of contract.

Here’s how that compares:

• Up 0.3 pts. from August and 1.2 pts. from September 2025
• The highest share on record outside of March and April 2020
• April 2020 came in at 15.6%

Redfin calls this the strongest buyer’s market on record, which means sellers are competing for buyers. When buyers have plenty of options, they’re more likely to walk away for reasons like these:

• Expensive issues that come up in the inspection
• A monthly payment that’s higher than they expected 
• A change of heart 

Five big buyer’s markets had the highest cancellation rates:

• Jacksonville, FL: 19.9%
• Tampa, FL: 18.8%
• Las Vegas: 18.6%
• San Antonio: 18.5%
• Phoenix: 18.4%

Deals held together best in San Francisco, where 2.8% of contracts fell through. Nassau County, NY, San Jose, CA, Montgomery County, PA and New York all came in under 8%.

San Francisco, Nassau County and Montgomery County are three of the country’s five seller’s markets. When there are more buyers than sellers, buyers are less likely to back out.

The Play for Agents

Zhao’s advice gives agents a clear starting point on both sides of the deal.

For listing clients:

• Price realistically from the start
• Talk through flexibility like a rate buydown or help with closing costs, since buyers are stretched thin 

For buyer clients:

• Negotiate on price
• Ask the seller to cover closing costs or repairs
• See whether the seller will pay for a mortgage-rate buydown
• Run the monthly payment numbers before making an offer, since a higher-than-expected payment is one reason deals fall apart

With cancellations near a record high, keep a close eye on every deal from contract to closing.