Zillow: Winter Comes Early in the Housing Market as Newly Pending Sales Fall

The usual fall slowdown and high mortgage rates combined to slow housing activity in September, according to a new Zillow report.

Closed sales of existing homes fell 2.5% from a year earlier, according to Zillow’s preliminary nowcast. Newly pending sales, a leading indicator of future closings, fell 8.5% year over year, Zillow said.

According to the online brokerage’s data, the sales slowdown comes as mortgage rates ended September at 7.28%, the highest reading since November 2023, according to Freddie Mac. Zillow said its latest forecast calls for continued declines in home sales through year-end.

Zillow noted that home values remain little changed, up just 1% over the past year, according to the Zillow Home Value Index. Higher rates have pushed the typical mortgage payment to be 6.7% higher than a year ago, assuming a 20% down payment and excluding taxes and insurance, Zillow noted.

The absence of buyers is limited in how much it can bring down home values because sellers have retracted as well, Zillow said.

It said that most sellers buy another home, so the same forces keeping first-time buyers on the sidelines are also keeping a lid on inventory. While there are more homes for sale than in recent years, the growth of new inventory is slowing, so home values are more likely to remain relatively flat rather than decline, Zillow reported.

The brokerage said that there were 0.4% more new listings than in September 2025, although that is 11.9% below the pre-pandemic baseline. Total for-sale inventory was 2.5% higher than a year ago, marking the 34th consecutive month of annual gains, Zillow noted.

Inventory remains 16.1% below pre-pandemic norms, it said.

Zillow noted that the for-sale market’s slowdown was predictable given where mortgage rates stand right now, but the continued strength in the rental market is more surprising.

The typical U.S. rent rose 2.7% year over year in September, Zillow said, the largest annual gain since April 2025, according to the Zillow Observed Rent Index. It showed that annual rent growth has accelerated every month since April and is widespread, rising for both multifamily and single-family homes.

Home Values & Mortgage Payments

The typical U.S. home value is $366,913.

The Zillow Home Value Index (ZHVI) fell 0.5% month over month in September. Home values are 1% higher than a year earlier.

The monthly mortgage payment on a typical U.S. home is $1,922, assuming a 20% down payment and excluding taxes and insurance. That is 6.7% higher than last year.

Inventory

In September, 1.39 million homes were for sale nationwide.

Active inventory was 2.5% higher than a year earlier. Inventory fell 1.5% from August.

New for-sale listings totaled 343,311 in September, up 0.4% from a year earlier and down 3.9% from August.

Sales

319,346 homes were sold in September, according to the preliminary Zillow sales count nowcast. That is 2.5% lower than a year earlier and down 5.6% from August. These figures will be revised mid-month.

Newly pending listings, which measures listings that changed from for-sale to pending status rather than closed sales, show an 8.5% decrease from a year earlier and a 11.2% decrease over August.

Affordability

A household earning the median income would need to spend 34.3% of its income on the typical monthly mortgage payment (assuming a typically valued home and a 20% down payment, and including estimates for taxes, maintenance and insurance). That is up from 33.7% a year earlier and 33.9% in August.

A household earning the median income would need to spend 26.3% of its income on the typical rent in September. That is down from 26.4% a year earlier and flat from August.

Competition

Homes took a median of 29 days to go pending in September. That was two days longer than a year earlier and two days longer than August.

The share of listings with a price cut in September was 27.4%. That was up from 26.2% a year earlier and up from 26.3% in August.

27.6% of homes sold above list price in August, the most recent data available. That’s compared to 26.9% a year earlier and 29.6% in July.

Rents

The typical rent nationwide is $1,932, according to the Zillow Observed Rent Index. That’s 2.7% higher than a year earlier and up 0.1% from August.

39.6% of rental listings on Zillow offered a concession in September. That’s up from 37.4% a year earlier and up from 39.3% in August.