According to a new report from Redfin, the U.S. housing market lost more steam in September 2025, as elevated borrowing costs and growing inventories pushed seller competition to its weakest level in six years.
Just 25.3% of homes sold last month went for more than their final list price, down from 28.5% a year earlier and marking the lowest share for any September since 2019. Other gauges of market heat also softened, signaling a steady shift of power back to buyers.
The average sale-to-list-price ratio fell to 98.6% from 99.1% a year earlier, meaning the typical home sold for 1.4% below asking. Meanwhile, only 32.8% of homes that went under contract did so within two weeks of hitting the market, also the lowest September reading in six years.
Homes are lingering longer, too. The typical property that found a buyer in September sat on the market for 50 days–the slowest pace for that month since 2016.
Buyers Hold the Cards
The cooling market reflects a combination of affordability pressures and cautious sentiment. Mortgage rates, insurance premiums, and property taxes remain significantly higher than during the pandemic, constraining purchasing power. Inventory, meanwhile, has climbed enough that many would-be buyers can take their time.
“There are roughly 36.7% more home sellers than buyers right now–a near-record gap,” Redfin said. “That’s giving buyers more room to negotiate and ask for concessions.”
“Homebuyers have extremely high expectations,” said Roze Swartz, a Redfin Premier agent in Houston. “Some remember being preapproved for a 3% mortgage rate and a $450,000 house. Now they can only afford $325,000 but still want the same home. Sellers can’t be picky on price–if they don’t have the lowest price in the market, they’re not even getting showings.”
Home Prices Tick Higher
Despite softer competition, prices climbed modestly. The median U.S. home sale price rose 1.7% year over year to $435,545 in September–the biggest gain in six months and the highest September on record.
The rebound comes after inventory growth earlier in the year had cooled price appreciation. Active listings slipped 0.6% from August to 1.96 million on a seasonally adjusted basis but were still up 8% from a year ago. Some sellers are opting to rent out properties rather than slash asking prices.
Sales Edge Up as Mortgage Rates Ease
Existing-home sales rose 0.4% month over month and 4.5% from a year earlier to a seasonally adjusted annual rate of 4.25 million, the highest level since January. Total home sales climbed 0.7% month over month and 3.4% year over year–the strongest showing since October 2022.
The modest sales bump likely reflects a gradual easing in mortgage rates, which averaged 6.35% in September, the lowest in a year. Even so, pending sales–a more current measure of buyer demand–fell 1% from August and 2.4% from a year earlier, the sharpest annual decline since February.
“Lower rates have pulled some buyers off the sidelines,” the report said, “but many are still waiting for further declines before jumping in.”
Market Splits by Region
The Midwest led the nation in price growth. Median sale prices rose 9.1% in Milwaukee, 7.9% in Detroit, and 7.4% in Cleveland. Texas metros, by contrast, saw declines: Dallas (-2.7%), Austin (-2.3%), and Houston (-1.5%).
Pending sales climbed most in San Francisco (17.1%), Riverside, Calif. (11.6%), and West Palm Beach, Fla. (11%). Houston (-11.7%), Denver (-8.4%), and San Antonio (-6.3%) posted the steepest drops.
In San Francisco, homes sold for an average of 4.2% above list price–the highest premium nationwide. By contrast, Florida metros such as West Palm Beach (94.8%), Miami (95.2%), and Fort Lauderdale (95.4%) recorded the deepest discounts.
Homes also lingered longest in South Florida. In Fort Lauderdale, the median home under contract spent 97 days on the market, 26 days longer than a year earlier. Only three metros–Kansas City, San Francisco, and Chicago–saw a shorter selling window.
Outlook
The data paint a picture of a housing market in transition: prices firming after months of softening, but sales momentum constrained by affordability and confidence concerns. If mortgage rates continue their slow descent, economists say, the balance could tilt again heading into 2026–but for now, buyers have the upper hand.
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