Higher mortgage rates are reshaping the fall housing market, pushing more sellers to reduce prices while fewer buyers move forward with a purchase, according to the recently released Realtor.com® September 2026 Monthly Housing Trends Report.
The share of active listings with a price reduction rose to 20.8% in September, up 0.9 percentage points from a year earlier, and the highest September reading on record. At the same time, active inventory grew 5.4% year-over-year to over 1,161,000 homes, narrowing the gap to typical pre-pandemic levels to 9.1%, marking the first time the gap has fallen below 10% in the current recovery. The stock of homes under contract declined 4.1% year-over-year, marking a second consecutive monthly decline and the steepest annual drop since March 2025.
“September’s housing data shows that buyers are gaining leverage, but higher mortgage rates are limiting how much of that opportunity they can use,” says Danielle Hale, chief economist at Realtor.com. “Inventory is improving and more sellers are adjusting prices, yet the decline in pending sales makes clear that affordability remains a central constraint as the fall season gets underway.
“The coming weeks can be an opportunity for well-prepared buyers, who can navigate today’s higher financing costs, to find more choices, less competition and greater room to negotiate,” she adds.
The national median list price was $419,250 in September, down 1.2% from August and 1.4% from a year ago. This was the 11th consecutive month of annual list-price declines. Price per square foot, which adjusts for changes in the size mix of homes for sale, fell 1.7% year-over-year. Homes spent a median of 61 days on the market, one day longer than in August, but one day fewer than a year earlier.
The Northeast and Midwest led inventory growth, up 11.6% and 11.3%, respectively, while the West (+6.2%) and South (+2.6%) also posted gains. Forty-three of the nation’s 50 largest metros recorded more homes for sale than a year ago.
“More homes are available than they were a year ago, and the inventory gap with the pre-pandemic market is closing,” says Realtor.com Senior Economist Jake Krimmel. “But the source of that improvement matters. It is arriving as demand cools in response to higher borrowing costs, not because a new wave of sellers is rushing into the market.”
Sellers have so far not repeated the broad late-summer and early-fall retreat from the market seen last year. About 5.6% of homes on the market were delisted in September, in line with a year ago and without evidence of a broad delisting spike. Instead, price reductions are becoming the more visible adjustment.
As the market heads deeper into fall, the key test will be how sellers respond if higher rates continue to constrain demand. Realtor.com economists will monitor the depth and frequency of price reductions, whether price cuts generate more signed contracts, and whether sellers begin to delist homes at a higher rate. The divergence between rising inventory and falling pending sales will also be a key indicator of whether the market is moving toward a more prolonged period of stagnation.
Seller concessions also rising
A new Redfin analysis found that sellers provided concessions in 44.7% of U.S. home sales in August, up from 42.6% a year earlier and the highest August share in records dating to 2020.
In Dallas, concessions were even more common. They appeared in 53.3% of sales, up 6.5 percentage points year-over-year.
“But the dollar amount alone does not show which offer will leave a buyer better off,” says Bob Lovell, founder of Home Marketing Services, who has worked with Dallas-Fort Worth homebuyers for nearly three decades. “A seller saying, ‘I’ll give you $10,000,’ sounds simple, but the next question should be, ‘Ten thousand dollars toward what?’ Putting that money toward closing costs, repairs, the interest rate or the purchase price can affect a buyer’s finances in very different ways.”
Lovell explains about the four deals buyers should compare.
Closing costs: Keep more cash after closing. Seller credits can reduce what buyers need to pay upfront, leaving more savings for moving costs and unexpected expenses. “Getting the keys with an empty bank account isn’t the goal,” he says. “If the seller can cover eligible closing costs, that can give a buyer some breathing room after move-in.”
Repairs: Put the concession toward a real expense. If an inspection uncovers an urgent problem, a repair credit can help, but buyers should know what the work will actually cost. “A $5,000 repair credit sounds good until you learn the repair costs $10,000,” Lovell says. “Price the problem before deciding whether the offer is enough.”
Rate buydown: Check the later payment. With the average 30-year fixed mortgage rate over 7%, a rate buydown can be appealing. But buyers should check whether the lower rate is temporary. “Don’t stop at the first-year payment,” Lovell says. “Ask what you’ll be paying when the discount ends.”
Lower price: Think beyond today. A price reduction can mean borrowing less, but it may not provide as much immediate help as money toward closing costs. “If cash is tight today, a lower price may not solve that problem,” Lovell says. “Buyers should decide whether they need savings now or want to reduce what they’re paying for the home.”
Before choosing one of the above options, Lovell recommends that buyers ask where each dollar saves them money: at closing, every month, on a necessary repair or over the life of the loan?
“Don’t negotiate just to say you got something from the seller,” he says. “The useful concession is the one that solves the financial problem you actually have. For one family, that’s keeping cash in the bank. For another, it’s lowering the payment. For someone else, it’s making sure they aren’t buying a house with a repair bill waiting for them.”
