Home Sellers Deepen Price Cuts in September as Mortgage Rates Climb

In an aerial view, houses undergo construction in a neighborhood in Austin, Texas, on April 17, 2025. Brandon Bell/Getty Images

Home sellers cut asking prices at the fastest pace in nearly four years in September, as high borrowing costs weakened buyer demand and left more homes on the market.

The share of U.S. listings with a price reduction reached 20.8 percent in September, up 0.9 percentage point from a year earlier, according to Realtor.com’s monthly housing report released Wednesday.

That was the highest September reading since 2018 and the highest price-cut share for any month since October 2022.

Borrowing costs rose sharply during the month. The average rate on a 30-year fixed mortgage climbed from 6.66 percent in late August to 7.03 percent in the week ended Sept. 24, according to Freddie Mac. A year earlier, the average stood at 6.30 percent.

Higher mortgage rates increase monthly payments and reduce how much buyers can afford to borrow. Realtor.com estimates that a half-percentage-point swing in rates can change purchasing power by roughly $30,000 for a buyer with a $2,000 monthly principal-and-interest budget.

“Demand rarely picks up much this time of year regardless, but the rate environment and underlying geopolitical uncertainty made sure the housing market’s fall stall came early this year,” Realtor.com senior economist Jake Krimmel wrote.

According to Wednesday’s report, the number of homes in pending status fell 4.1 percent from a year earlier in September, following a 0.2 percent decline in August. Pending sales also dropped 6.2 percent from the previous month.

At the same time, the number of homes available for sale continued to grow. Active listings increased 5.4 percent from a year earlier to about 1.16 million, the fastest annual growth in six months.

Inventory remains 9.1 percent below typical pre-pandemic levels, according to Realtor.com, but the gap has narrowed considerably as homes accumulate on the market.

With more properties competing for fewer buyers, sellers have increasingly been forced to adjust their expectations. The national median listing price fell 1.4 percent from a year earlier to $419,250, while the median list price per square foot declined 1.7 percent.

The pressure was particularly pronounced in the West, where 22.8 percent of listings had price cuts, up 1.8 percentage points from a year earlier.

This is the largest increase among the four major U.S. regions, according to the report.

Price reductions were also common in the South, where 21.6 percent of listings were discounted.

The Midwest stood at 20.7 percent, while the Northeast remained the tightest region, with price cuts on 15.2 percent of listings.

At the metro level, one-third of listings in Salt Lake City had been reduced in price, followed by 31.5 percent in Denver and 31.3 percent in Portland, Oregon.

By comparison, just 9.9 percent of listings in the New York metropolitan area had price cuts.

Heading into October, Realtor.com said, the key question is whether deeper cuts will be enough to bring more buyers back into the market while borrowing costs remain elevated.

“Also, for a few months now, pending sales have been declining while inventory has been,” Krimmel said. “That is a sign of stagnation that will be worth following in October.”