Pending Home Sales Drop 7.3 Percent in September
Higher mortgage rates have cooled the housing market, leading to a decline in contract signings for September 2026.
Updated on Oct. 21, 2026 in Residential
Live Poll
Do you believe current mortgage rates make now a bad time to buy a home?
Pending home sales across the United States dropped 7.3 percent in September 2026. This decline reflects a broader cooling of the housing market as prospective buyers face mortgage rates that have surged past 7 percent.
Why it matters
Higher mortgage rates have significantly reduced the purchasing power of families, contributing to weaker market conditions. This trend has also caused home asking prices to fall for 11 consecutive months through September 2026.
Contract signings fell by 7.3 percent in September 2026, marking an 11.3 percent decrease compared to the same period in 2025. This shift coincides with a 7 percent threshold exceeded by current mortgage rates.
The details
Rising mortgage rates have reduced the purchasing power of prospective buyers, leading to fewer signed contracts. While demand has softened, housing inventory climbed in September 2026. Markets are currently pricing in the possibility of another Federal Reserve rate hike, which could keep borrowing costs elevated as the year concludes.
Timeline
September 2025: Baseline period for the year-over-year sales comparison.
August 2026: Baseline month for the recent pending home sales decline.
September 2026: Month of the recorded 7.3 percent decline in pending sales.
End of 2026: Potential timeframe for an additional Federal Reserve rate hike.
The Home Front
The decline in pending home sales aligns with an 11-month stretch of falling asking prices across the national housing market. This trend illustrates a sustained adjustment in property values as elevated borrowing costs curb demand.
If you are currently looking to purchase a home, factor higher mortgage rates into your monthly budget projections before starting your search. Homeowners should track local inventory levels, as rising supply combined with falling prices may impact your home's equity position.
The takeaway
With market conditions softening, buyers should prioritize long-term affordability rather than timing a peak or floor in home prices. Keep an eye on any future Federal Reserve decisions, as these moves often influence whether your mortgage rate will rise or stabilize in the coming months.
Further reading
For a broader look at current housing trends, visit the Residential section.
Live Poll
Do you believe current mortgage rates make now a bad time to buy a home?
