Pending U.S. home sales fell 1% year over year as mortgage rates ticked up after nine straight weeks of declines. Some would-be buyers are hesitant due to economic uncertainty, including jitters about potential layoffs and the government shutdown.

Pending U.S. home sales fell roughly 1% from a year earlier during the four weeks ending September 28, the biggest decline in nearly five months, according to a new report from Redfin, the real estate brokerage powered by Rocket. On a local level, pending sales fell in 30 of the 50 largest U.S. metro areas, led by Houston (-15.4% year over year), Denver (-12.3%) and Las Vegas (-11.2%).

There are several reasons would-be homebuyers are backing off:

• High home prices. The median home-sale price rose 2.5% year over year, the biggest increase in six months.
• Mortgage rates have reversed course, started rising again. The weekly average mortgage rate ticked up to 6.3% from 6.26%, a small increase but the first after nine straight weeks of declines. Rising rates are exacerbating rising sale prices; the median monthly housing payment is $2,590, up about $40 from early September’s 9-month low.
• Supply surplus is dissipating. The total number of homes for sale is up 8.4%, the smallest increase since the start of 2024, as growth in new listings slows from the spring and the pool of inventory slowly gets bought up.
• Widespread economic uncertainty. Some would-be buyers are holding off due to recession nerves, concerns about potential layoffs, and jitters about the federal government shutdown, which started on Tuesday night.

But there are a few bright spots in the housing market:

• Sales of starter homes, those whose sale prices fall into the 5th-35th percentile, increased 4% in August, even as demand for higher-priced homes stumbled.
• Buyers have negotiating power, with half a million more sellers than buyers in today’s housing market.
• The ADP private-sector job report, which markets are relying on because the shutdown means there's currently no government jobs data, shows that the labor market was fairly weak in September. That should push mortgage rates down slightly unless we subsequently get jobs data that contradicts the ADP report.

“For buyers, there are deals to be made,” said Jason Gale, a Redfin Premier agent in New Orleans. “People who need to move are still out there house hunting, and they’re finding that it’s a good time to negotiate with sellers, especially for homes that have been on the market for longer than a few weeks. Most buyers are able to get a discount on the price or significant help with their closing costs.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-prospective-homebuyers-back-away

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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