Home Sales and Listings Both Declined at a Record Pace in September

Redfin, the Seattle-based real estate company, is reporting that home sales and listings of homes for sale both declined in September at a record pace. This comes as rising mortgage rates have prompted both buyers and sellers to stay put.

The number of homes sold dropped 25% year-over-year, while new listings declined 22%—the largest declines since May and April of 2020, when the pandemic brought the housing market to a near standstill. The median home-sale price slipped 0.5% month-over-month in September, but it is still 8% higher on a year-over-year basis, up to $403,797.

Adding additional background and her analysis, Redfin Economics Research Lead Chen Zhao said:

“The US housing market is at another standstill, but the driving forces are completely different from those that triggered the standstill at the start of the pandemic. This time, demand is slumping due to surging mortgage rates, but prices are being propped up by inflation and a drop in the number of people putting their house up for sale. Many Americans are staying put because they already relocated and scored a rock-bottom mortgage rate during the pandemic, so they have little incentive to move today.

The housing market is going to get worse before it gets better. With inflation still rampant, the Federal Reserve will likely continue hiking interest rates; that means we may not see high mortgage rates—the primary killer of housing demand—decline until early to mid-2023.”