US Pending Home Sales Fall 4.0% in September, Nearing 12-Year Low

US pending home sales fell 4.0% in September on a seasonally adjusted basis, the largest monthly decline in more than three years, Redfin reported. Pending sales reached their lowest level since spring 2014, excluding April 2020 amid the onset of the pandemic.

Redfin attributed the decline largely to rising mortgage rates, which surpassed 7.0% by the end of September. For the first time since September 2023, pending home sales declined in all 50 of the most populous US metropolitan areas.

The largest year-over-year declines were concentrated on the West Coast. Seattle recorded the steepest drop at 24.4%, followed by Los Angeles (16.0%), San Diego (15.8%), and Anaheim, CA (15.5%). Redfin noted that higher mortgage rates weighed heavily on demand in these expensive markets, while uncertainty in Seattle’s local job market also contributed to weaker sales.

Commenting on the report, Redfin Head of Economic Research Chen Zhao said:

“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.”