According to a new report from Redfin, U.S. pending home sales dropped 4% month-over-month in September, hitting their lowest level since spring 2014.
Pending home sales also fell across all major metros. This seems tied to mortgage rates rising over 7%; the last time this happened was in 2023, the last time mortagage rates hit that high.
However, there is a major advantage for builders that can offer incentives to buyers, many of whom are searching and are serious, looking to move out of necessity.
“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. 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.”
