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Existing-home sales (not seasonally adjusted) were 341,000 in September, down 4.7% from August. This is typical around this time of year, as the school year kicks off and families face more logistical challenges heading into fall. However, when we compare the percentage decrease in 2026 to pre-pandemic levels, it appears there was a much softer fall slowdown than is typically seen around this time of year. From 1999 to 2019, sales fell an average of about 15% from August to September, about 3 times less activity than what was seen this year. But September’s smaller drop does not mean the seasonal cooling has faded. From July through September, sales fell about 15% this year compared with an average of 13% from 1999 to 2019. In other words, it seems that the fall slowdown started earlier this year.

August Was the Unusual Month

Sales fell 10.7% from July to August, the largest decrease over this period since at least 1999. Historically, August sales tend to increase by 2.6% on average.

This happened largely due to mortgage rates. Rates fell to about 6% in February and March, the lowest level since 2022, which boosted activity in late spring and early summer. In June, sales reached 424,000, up 8% from a year earlier. However, as rates moved back up to about 6.7% over the summer, sales cooled earlier than usual.

This is not the first time rates have shifted the timing of the seasonal pattern. In 2023, rates rose over the summer, and sales decreased even earlier (in July). In 2024, rates peaked at about 7% in the spring, and June sales fell instead of experiencing the typical spike. However, when rates dropped to about 6.2% in September, October sales rose. Thus, the seasonal pattern remains, but in today’s market, the data shows that its timing is increasingly tied to mortgage rates.

Inventory Kept Rising

Another key difference between the two periods is recognized in the supply side. Inventory increased by 1.9% to 1.60 million in September, while historically it tends to decline by about 2.6% from August to September. This was the highest September inventory level since 2019, giving buyers more options as sales activity slowed. However, inventory is still about 12% below September 2019; and relative to the pace of sales, supply is about 4.7 months. 

Prices Follow a Typical Pattern

Unlike sales and inventory, home prices aligned with a more typical seasonal pattern. The median price declined by 2.4% from August to September to $417,500, on par with the historical average reduction of about 2.6%. Prices usually ease in the fall as fewer higher-priced family homes sell after the school year begins. Compared to a year earlier, the median price was up 1.3%, one of the smallest year-over-year gains in September in more than a decade.

Key Takeaways for Buyers and Sellers

Looking ahead, mortgage rates rose from about 6.7% in early September to 7.4% in October. While this hasn't yet been reflected in closed sales, we can look at the last time rates rose significantly to gauge the potential effect. In the fall of 2023, sales activity decreased by about 15% from September to December following a jump in rates, reflecting about twice the typical decline. In light of this, we may expect the coming months to be slower than usual.

For buyers who are financially ready, this may be a good time to shop. There are more homes to choose from than at any other point since 2020, and with less competition, there can be more opportunities for price negotiation or concessions. For sellers, pricing the home right from the start and being open to negotiation will matter more as homes take longer to sell.

While many factors can impact sales levels in a particular month, it is important to consider how current market conditions can amplify or suppress the trends we tend to see as the seasons change. With relatively low inventory and sales compared to historic levels, coupled with mortgage rates above 7%, prospective buyers are likely to be more flexible with their timing, especially if affordability improves.

Based on recent data, the housing market still follows its usual seasonal rhythm; however, the fall slowdown arrived a month earlier than expected. As we have seen, mortgage rates can influence buyers' timing and will likely shape how the rest of the year unfolds.