Zillow Reports Housing Market Slowdown with Decline in Pending Sales Amid High Mortgage Rates
According to Zillow's September Market Report, the U.S. housing market is experiencing a slowdown as newly pending home sales fell by 8.5% year over year due to high mortgage rates and seasonal factors. Closed existing home sales also dropped 2.5% compared to last year. Mortgage rates reached their highest level since November 2023 at 7.28%, pushing typical monthly payments up 6.7%. Despite a slight annual increase in home values of just 1%, the cost burden on buyers has risen significantly. In contrast, the rental market remains strong with U.S. rents rising by 2.7% year over year to $1,932—the largest gain since April 2025. This trend reflects a shift in buyer behavior as some opt for renting due to high costs and uncertain mortgage rate conditions. Inventory levels have increased slightly compared to last year but remain below pre-pandemic norms. Zillow's chief economist noted that while the slowdown was expected, continued rental growth is surprising. The report suggests sales may stay lower through Q4 unless rates drop quickly enough to reinvigorate buyer and seller activity.
Topics: home sales housing market mortgage rates rental prices