Home Sales Plummet: Worst September Since 2001

Pending home sales experienced their worst month on record in September 2026, falling 7.3% from August. This marks the lowest reading since the Pending Home Sales Index began in 2001, reflecting a sharp downturn in the housing market. The primary drivers are significantly higher mortgage rates and persistently elevated home prices.

The average 30-year fixed mortgage rate reached 7.43%, a substantial increase that, combined with the median single-family home price of approximately $435,000, has drastically reduced affordability. Experts estimate that an increase from 6% to 7% in mortgage rates can disqualify nearly 6 million Americans from affording a median-priced home with a 10% down payment.

Economists observe that many potential buyers, particularly first-time homeowners, are remaining on the sidelines. Those already with low mortgage rates are hesitant to move, contributing to market stagnation. The West region saw the most significant drop in pending sales, with rising energy prices adding to overall economic uncertainty.

Simultaneously, new home construction is slowing. Housing starts fell 5.2% in September from August, indicating a broader contraction in the housing sector. The typical monthly mortgage payment now accounts for 40% of average after-tax income, a stark increase from 35% at the beginning of the year.