U.S. pending home sales approached a 12-year low in September as rising mortgage rates weakened buyers’ purchasing power, leaving the pandemic shutdown as the only interruption to the comparison. Contracts to purchase homes dropped to their lowest level since spring 2014, excluding April 2020, according to an October 12 report from Redfin. The slowdown extended across the country’s largest metropolitan markets, even as a growing supply of properties gave buyers who remained active more choice and negotiating leverage.

Pending sales fell 4% from August on a seasonally adjusted basis, the largest monthly decline in more than three years. The weekly average mortgage rate reached 7.5% of homebuying deals collapsed during September—the highest proportion in Redfin’s records. Together, the figures describe a market in which more available homes have not translated into stronger purchasing activity.

The pending-sales measure captures homes going under contract, making it a more immediate indicator of housing activity than completed transactions. Redfin attributed September’s decline largely to mortgage rates, which increased steadily and exceeded 7% by the month’s end. The historical comparison is striking but carries an important qualification: activity was also lower in April 2020, when the arrival of the pandemic brought the housing market to a standstill. Outside that exceptional disruption, the latest reading takes the market back to spring 2014.

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The weakness was unusually broad. Pending sales declined in all 50 of the most populous U.S. metropolitan areas for the first time in three years. The previous instance was September 2023, which Redfin also identified as the last occasion when mortgage rates remained above 7% for a sustained stretch. That parallel places the latest downturn alongside another period of elevated borrowing costs. It also shows that September’s weakness was not confined to a handful of expensive markets, although those markets recorded some of the sharpest declines.

West Coast cities led the year-over-year falls. Seattle registered a 24.4% decline, followed by Los Angeles at 16%, San Diego at 15.8% and Anaheim, California, at 15.5%. Redfin described those Southern California markets as among the country’s most expensive, making higher mortgage rates particularly difficult for buyers already near their affordability limits. Seattle also faces high housing costs, while an unsettled local employment market has further restrained demand, according to the company. Those annual metropolitan comparisons are distinct from the national monthly decline.

Completed sales provided another indication of the slowdown, falling 1.6% nationwide from August to their lowest level since the end of 2023. Most September completions involved contracts signed in July or August, when mortgage rates were already rising and broader economic uncertainty was discouraging prospective purchasers, Redfin said. The timing matters: the closed-sales figures largely reflect earlier buying decisions, while the September pending-sales reading captures the further deterioration as borrowing costs climbed. Both measures declined, but they describe different stages of the purchasing process.

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For buyers, the picture is not uniformly negative. Chen Zhao, Redfin’s head of economic research, said rates above 7% reduce the number of households able to afford a home, but weaker competition creates opportunities for those still able to proceed. Buyers have more scope to seek reductions in price, help with closing costs or repairs, and, in some cases, seller-funded mortgage-rate buydowns. Those concessions offer a counterweight to the affordability squeeze, although they do not change the report’s central finding of fewer contracts being signed.

The rise in available homes and the record share of failed deals underline that shift in bargaining conditions.5% cancellation share to a market that gives house hunters greater freedom to abandon purchases. More supply and less competition can strengthen a buyer’s position without producing an immediate recovery in sales. The report’s figures therefore show two developments occurring together: weakening transaction activity and greater flexibility for buyers who remain in the market despite higher financing costs.

Sellers, meanwhile, still have a potential audience among households that need to relocate, Zhao said. Zhao’s advice was to set realistic asking prices at the outset and remain open to financial concessions, including covering closing costs or paying for a rate buydown. That approach recognises the pressure on buyers’ budgets rather than assuming that increased choice alone will bring them back. It also distinguishes a slower market from one without demand: some purchases continue even as many prospective buyers withdraw.

The next question is whether weak sales translate into softer prices. Zhao said the slowdown could leave prices flat or push them lower, presenting that as a possibility rather than an established outcome. Redfin’s report adjusts its figures for seasonal patterns except for median sale prices and mortgage rates. For now, its clearest signals are declining contracts, fewer completed transactions and more homes available, with the scope for negotiation set against the continuing burden of elevated borrowing costs.