Pending Home Sales Drop 8.5% as Mortgage Rates Climb, and a Record Share of Sellers Cut Prices: What Buyers Should Know

The housing market is cooling early this fall, which could give patient buyers a little more room to negotiate.

Two new housing reports released Tuesday, Oct. 6, point the same way: higher mortgage rates are slowing home sales, and more sellers are lowering their asking prices.

Zillow's September market report found that newly pending sales, homes that went under contract during the month, fell 8.5% from a year earlier. Zillow called it "an early winter in the housing market." Meanwhile, Redfin found that the share of sellers cutting prices hit a record for this time of year, as reported by Fortune.

What Zillow found

According to Zillow's September report:

• Typical home value: $366,913, up just 1% from a year ago.
• Monthly mortgage payment on a typical home: $1,922, up 6.7% from last year.
• Affordability: A household earning the median income would spend 34.3% of its income on the typical mortgage payment.
• Inventory: 1.39 million homes were listed for sale, up 2.5% from a year ago. That's the 34th straight month of yearly gains.
• Price cuts: 27.4% of listings had a price cut.
• Speed: The typical home went under contract in 29 days.

Zillow noted that mortgage rates reached 7.28% by the end of September, the highest since November 2023.

"The for-sale market's slowdown was predictable given where mortgage rates currently stand, but the continued strength in the rental market is more surprising," said Mischa Fisher, Zillow's chief economist.

What Redfin found

Redfin reported that 21.1% of U.S. home sellers with active listings cut their asking price in the four weeks ending Sept. 20. That's the highest share for this time of year since Redfin began tracking it in 2022, according to Fortune.

Price cuts were most common in Denver (30.9%), Indianapolis (29.9%) and San Antonio (26.8%). They were least common in San Francisco (9.6%).

Redfin also found that home sellers outnumbered buyers by 58% in August, the widest gap in records going back to 2013.

Renters are feeling a different squeeze

While sales are slowing, rents are rising faster. Zillow's typical rent hit $1,932, up 2.7% from a year ago, the biggest yearly gain since April 2025. A median-income household would spend 26.3% of its income on rent. Still, 39.6% of rental listings offered concessions, such as a free month or reduced fees.

What this means for your wallet

• Buyers may have more leverage: With more homes on the market and more price cuts, you may be able to negotiate on price, repairs or closing costs. Still, "inventory is still very tight, and prices remain near record highs in many local markets," Bright MLS chief economist Lisa Sturtevant told Fortune.
• The rate matters as much as the price: A higher mortgage rate can raise your monthly payment even if the home price falls. Consider getting quotes from several lenders, since rates and fees can differ.
• Get preapproved first: A mortgage preapproval shows what a lender is willing to lend and can make your offer stronger.
• Sellers may need patience: Pricing realistically from the start may help avoid repeated cuts later.
• Renters can ask for deals: With many listings offering concessions, it may be worth asking a landlord about a discount or perks before you sign.

This article is for education only and is not financial advice. Everyone's situation is different.