Housing Market Sees Declines in Sales and Construction

Pending home sales in September decreased by 7.3% month-over-month and 11.3% year-over-year, according to a new report from the National Association of Realtors.

The Details: Home sales, future sales expectations and buyer traffic all fell last month, according to CNBC (Lean Left bias). The Realtors report showed pending sales declined in all four major US regions; the West experienced the largest decrease at -9.2% month-over-month and -15% year-over-year. Another report published Tuesday by the US Census Bureau showed single-family home construction last month also fell to its lowest level since September 2025, with housing starts falling 4.56% to 859,000 annualized. Building permits also fell 4%. Homebuilder sentiment was at its lowest levels in 14 years, according to the National Association of Home Builders.

For Context: Mortgage rates hit a three-year high last month, and the 30-year mortgage rate topped 7.6% for the first time since January 2025. The median existing home price was also $417,500 in September, a 1.3% increase from last year. Last month, the Federal Reserve raised its benchmark interest rate for the first time since 2023 by 0.25%.

RELATED: Report: Median Household Income Reached Record High in 2025

Mortgage Rates: Fast Company (Lean Left) said the report is "the latest confirmation that the housing market is cooling" and could continue to "well beyond 2026." It quoted a top economist in Washington DC who attributed the weakening housing conditions to "fast-rising" mortgage rates. Another source said rising mortgage rates, gas prices and broader inflation were also weighing on home builders, who must contend with "high construction loan costs, building materials and immigration enforcement activity" that could "cause construction delays." CNBC quoted a chief economist who said, "The housing market is about to go into a deep sleep unless Washington can do a 180 on its policies and make the cost of a new home more affordable."

Home Ownership is Still Possible: Several Fox Business (Lean Right) articles focused on optimism, including how and where home ownership is still possible. In one segment, Fox hosts interviewed the National Association of Home Builders CEO who said housing cost increases are slowing down, and that high mortgage rates and inflation are "eating up [the] good news." Another article cited a Redfin analysis that found housing costs could hypothetically return to "normal" in the next five years if mortgage rates fell to 6% and home price growth remained steady at about 2.1%. The same article noted that if mortgage rates remained between 7-8%, a return to "normal prices" could take 10 or more years. One more article described how condos have become the new starter home, which is making home ownership in some metro areas possible.

Wealth Movement: Wall Street Journal (Center) said America's home-buying market is divided between near-record home prices and high mortgage rates, and luxury home buyers who are making "jumbo down payments or all-cash purchases." It described wealthy employees moving into metro areas like San Francisco and Tampa, Fla. thanks to the AI tech boom, which it said "reflects the growing divergence in the fortunes of the country's economic classes." The outlet also reported that "Home builders are shifting their focus toward luxury homes, which generate far wider margins than entry-level homes," and that the low demand for entry-level homes gives others an opportunity to buy.

Written by the AllSides staff (of humans). Learn more. Support our mission. Suggest an improvement to this summary.