Fewer Americans signed contracts to buy homes in September than at any time since spring 2014, with the exception of the first weeks of the pandemic in 2020. Redfin says seasonally adjusted pending home sales fell 4 percent from August, the biggest one-month drop in more than three years. The brokerage’s metro data shows Los Angeles and San Diego among the steepest year-over-year declines, behind only Seattle.
A pending sale is a home with a signed contract that has not yet closed, so the count works as an early read on where the market is heading. This one points down: it fell in every one of the 50 most populous metro areas Redfin tracks, the first time that has happened since September 2023.
The question for anyone watching a local housing market is whether a drop like this makes it a buyer’s market where they live. In many places the answer is yes on paper, because the supply of homes for sale is climbing as sales fall, but it depends on the metro and on whether a household can carry a loan at 7 percent. The details below show how wide the spread is.
The Federal Reserve meets October 27 and 28, the next vote that can move the mortgage rates behind this slump in contracts.
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Seattle, Los Angeles, San Diego and Anaheim fell the most
Redfin’s pending home sales report, dated October 12, lists the four biggest declines from a year earlier: Seattle at 24.4 percent, Los Angeles at 16 percent, San Diego at 15.8 percent and Anaheim, California, at 15.5 percent.
The smallest declines were in Montgomery County, Pennsylvania, at 1.6 percent, Pittsburgh at 2.1 percent and West Palm Beach, Florida, at 2.2 percent. None of the 50 metros posted a gain.
Mortgage rates above 7 percent
Chen Zhao, Redfin’s head of economic research, tied the drop to borrowing costs. “It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them,” she said. The weekly mortgage rate average reached 7.28 percent at the end of September, the highest in three years.
The rate has gone up since. Freddie Mac’s weekly survey put the 30-year fixed average at 7.40 percent on October 8, against 6.30 percent a year earlier. On a $300,000 loan, that gap in rate is the difference between a principal-and-interest payment near $1,857 and one near $2,077 each month, by the standard payment formula.
Cancellations and price cuts
Supply is rising as contracts fall. Redfin says the total supply of homes for sale rose 1.2 percent in September to its highest level since March 2020, while new listings rose 0.3 percent.
Deals that do get signed are also falling apart more often. Redfin says 14.5 percent of homes that went under contract in September were later canceled, the highest share since the pandemic began and, apart from March and April 2020, the highest on record. Jacksonville, Florida, had the highest cancellation rate at 19.9 percent, followed by Tampa at 18.8 percent, Las Vegas at 18.6 percent, San Antonio at 18.5 percent and Phoenix at 18.4 percent. San Francisco had the lowest at 2.8 percent.
Sellers are cutting asking prices to find buyers. About 19.8 percent of sellers with active listings, roughly 1 in 5, cut their price in September, and the share rose in 43 of the 50 metros. The report says 60.5 percent of homes sold for less than their original asking price, continuing an 18-month stretch of about 3 in 5 homes doing so. The median sale price still rose 1.3 percent from a year earlier to $393,895, the smallest gain since February. Asking prices, however, slipped 0.5 percent from August.
Brian Connelly, a Redfin Premier agent in Boston, told Redfin that sellers should “be aggressive and list it potentially 5-10% below what you think you should list it for.”
Closings will keep falling
Closed sales dropped 1.6 percent in September to their lowest level since the end of 2023. Redfin notes that most September closings went under contract in July or August, so the weaker contract count has yet to show up fully in closings.
The National Association of Realtors tracks the same step with its own index. Its latest release, for August and published September 17, showed contract signings up 0.3 percent from July but still below the year before. Lawrence Yun, NAR’s chief economist, said signings were “running roughly 30% below where they were in the years leading up to the pandemic.”
Reading a pending-sales drop in a home’s own market
A national number can mislead about a single town. Redfin’s metro list shows how wide the spread is, from a 24.4 percent drop in Seattle to 1.6 percent in Montgomery County. A seller or buyer can ask an agent for the same measures for a specific zip code: pending sales against a year ago, the share of listings with price cuts, and how many deals fell through.
The signs that a market is tilting toward buyers, as Redfin lays them out, are rising supply, more price cuts, more homes selling below asking and more canceled contracts. In September, supply, price cuts, below-asking sales and canceled contracts all pointed the same way. Where they do not, as in Montgomery County or San Francisco, sellers kept more leverage.
The next checkpoints are the Federal Reserve’s October 27 and 28 meeting and Redfin’s next monthly report, which will show whether September’s contract slump carried through.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
