Weekly Real Estate News
Summary
Redfin reports September pending home sales fell 4% from August, while 14.5% of contracts were canceled and inventory reached its highest level since March 2020.
U.S. pending home sales fell 4% in September from August, their steepest monthly decline in more than three years, according to new figures released Monday by Redfin. The brokerage said the number of homes going under contract was the lowest for any month since spring 2014, apart from the abrupt pandemic shutdown in April 2020.
The retreat reached every one of the 50 largest metropolitan areas on a year-over-year basis. Seattle recorded a 24.4% decline, while Los Angeles fell 16%, San Diego 15.8% and Anaheim 15.5%. These comparisons are different from the national 4% month-over-month figure; the report uses seasonally adjusted figures for pending sales.
Mortgage borrowing costs were a central factor. Freddie Mac’s weekly 30-year mortgage rate averaged 7.28% at the end of September, according to Redfin’s analysis. Rates subsequently reached 7.40% in the October 8 survey. Higher financing costs have reduced what a given household income can support, even as some sellers have become more flexible.
The weakness extends beyond contracts. Closed home sales fell 1.6% month over month in September, reaching their lowest level since late 2023. That measure largely reflects contracts signed earlier in the summer, so it does not capture all of the latest deterioration in demand.
Meanwhile, the number of homes available for sale rose 1.2% from August, reaching the highest level since March 2020. Redfin attributed the increase to buyers withdrawing more quickly than sellers. New listings rose only 0.3% month over month, suggesting the inventory buildup was driven more by slower absorption than a rush of new sellers.
Negotiations have shifted accordingly. Redfin found that 60.5% of homes sold in September closed below their original asking prices. Nearly one in five active sellers, 19.8%, reduced an asking price during the month. The median sale price was $393,895, up 1.3% from a year earlier, its slowest annual increase since February. The price measures are not seasonally adjusted.
One of the report’s clearest warning signs is the rate at which signed contracts are failing. Redfin estimates that 14.5% of home purchases under contract in September were canceled, the highest September share in its records and, outside the first pandemic shutdown, its highest share for any month. Jacksonville, Florida, led the major markets at 19.9%, followed by Tampa at 18.8%, Las Vegas at 18.6%, San Antonio at 18.5% and Phoenix at 18.4%.
Contract cancellations do not necessarily indicate mortgage defaults or completed foreclosures. Buyers may exit during inspection or financing contingencies, or decide a transaction no longer meets their needs. Still, a rising cancellation share complicates forecasting for agents, sellers, builders and lenders whose pipelines depend on contracts becoming closings.
There is an important distinction between these figures and the earlier Redfin report on pending sales. Monday’s release provides a new September monthly reading, fresh metro-level declines and updated cancellation data. It is a material continuation of the housing slowdown, rather than a repetition of the earlier report.
Redfin’s report is based on the brokerage’s market data and methodology; it is not the National Association of Realtors’ pending home sales index. The two series should not be presented as interchangeable. The next tests will be whether October contracts stabilize and whether September’s unusually high cancellation rate translates into another decline in closed sales.
