Americans signed fewer contracts to buy homes in September than in any month since the spring of 2014, outside the brief pandemic shutdown, as the 30-year mortgage rate pushed back above 7% and stayed there.
Pending home sales fell 4% from August on a seasonally adjusted basis, the largest one-month drop in more than three years, according to a report Redfin published Oct. 12, 2026. The brokerage said the only month on its record with weaker contract signings was April 2020, when the arrival of the pandemic froze transactions outright.
The decline was universal. Pending sales fell from a year earlier in all 50 of the most populous U.S. metropolitan areas, the first time that has happened in three years. The last such month was September 2023 β which Redfin notes was also the last stretch when mortgage rates held above 7% for a sustained period.
The weekly average 30-year rate reached 7.28% at the end of September, the highest in three years by Redfin’s count. Rates have kept rising since: Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed average at 7.40% in the week ended Oct. 8, 2026, its highest reading since November 2023.
“It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them,” said Chen Zhao, Redfin’s head of economic research. “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.”
Pending home sales fell hardest on the West Coast
Seattle posted the steepest annual decline at 24.4%, followed by Los Angeles at 16%, San Diego at 15.8% and Anaheim, Calif., at 15.5%. Redfin notes that the Southern California metros are among the priciest in the country, so rising rates hit them hardest and priced out buyers already on the fence; in Seattle, the report adds, a bumpy local job market is curbing demand as well.
The mildest declines came in cheaper, slower-moving markets: Montgomery County, Pa., down 1.6%, Pittsburgh down 2.1% and West Palm Beach, Fla., down 2.2%.
Closed sales β which mostly reflect contracts signed in July and August β fell 1.6% from August to their lowest level since the end of 2023.
Price growth is thinning along with demand. The median U.S. sale price rose 1.3% from a year earlier to $393,895 in September, the smallest increase since February. Asking prices slipped 0.5% from August and rose just 0.6% year over year, the weakest annual gain since April.
Median sale prices rose most in San Francisco (14.6%), Cleveland (7.9%) and St. Louis (6.7%), and fell most in Seattle (-4.4%), San Jose, Calif. (-3.4%) and Denver (-2.6%) β extending a divergence between the two big tech housing markets that RealtyWire reported earlier this year, with AI hiring holding up Bay Area prices while Seattle softens.
Nearly one in seven deals never closed
The most striking number in the report is a cancellation figure. Of the homes that went under contract in September, 14.5% had the deal fall through β the highest share in Redfin’s records apart from March and April 2020.
Redfin attributes that to leverage, describing the current market as the strongest buyer’s market in its records β sellers competing for buyers rather than the reverse. When buyers have options, a bad inspection or a monthly payment that lands higher than expected is enough to walk.
Cancellations clustered in the Sun Belt markets with the most supply: Jacksonville, Fla., led at 19.9%, followed by Tampa, Fla. (18.8%), Las Vegas (18.6%), San Antonio (18.5%) and Phoenix (18.4%). Only 2.8% of San Francisco contracts were canceled, and Nassau County, N.Y., San Jose, Montgomery County, Pa., and New York all came in under 8%. Redfin counts San Francisco, Nassau County and Montgomery County among just five seller’s markets left in the country.
Supply keeps building. The total number of homes for sale rose 1.2% from August to its highest level since March 2020 β not because sellers are rushing in, since new listings rose only 0.3% on the month, but because buyers are leaving faster than inventory clears. Nearly one in five sellers with an active listing (19.8%) cut the asking price in September, and the share cutting rose in 43 of the 50 metros. Some 60.5% of homes sold below their original asking price, extending an 18-month streak.
What sellers are being told
“For the last decade, there was almost a certainty that if you listed a home, it would sellβand it would usually sell quickly, with multiple offers,” said Brian Connelly, a Redfin Premier agent in Boston. “Now, the calculus has changed. If you’re not pricing slightly below nearby comps and prepping your home meticulously, your home may very well linger on the market.”
Time on market is moving in opposite directions. In Fort Lauderdale, Fla., the typical home that went under contract did so in 86 days, 20 days faster than a year earlier and the biggest improvement of any metro in the set, as the glut of Florida listings works itself off. Tampa added 16 days, followed by Orlando, Fla. (+12) and San Antonio (+8).
Zhao’s argument is that the slowdown contains its own correction: weak sales flatten or lower prices, the mechanism behind the brokerage’s own estimate that U.S. housing costs could return to something like normal within several years. For now the adjustment is showing up in cancelled contracts rather than in prices. Redfin’s figures are seasonally adjusted except for median sale prices and mortgage rates, and cover the 50 most populous metropolitan areas.
