Momentum in the US residential property market cooled dramatically in September 2026. The number of pending home sales, where purchase contracts have been signed but the actual completion is still pending, saw a noticeable downturn. Compared with the previous month of August, the barometer of contracted sales dropped by 7.3 per cent.
The slowdown is even more pronounced on an annual basis. Compared with September of the previous year, contract signings fell by 11.3 per cent. This double-digit decline illustrates the marked reluctance currently dominating large parts of the market.
Rising financing costs dampen demand
Rising mortgage rates are considered the primary reason for this downward trend. Increased borrowing costs for residential financing are weighing heavily on homeownership demand and have sustainedly discouraged many prospective buyers. The altered interest rate environment restricts affordability and forces potential purchasers to postpone or completely abandon planned transactions.
The development of pending sales traditionally acts as a forward-looking indicator for actual completions of existing homes in the coming months. Since four to eight weeks usually elapse between the signing of a purchase agreement and formal completion, upcoming completion statistics also point to a continued slump.
- —Decline in pending sales of 7.3 per cent compared with August
- —Fall of 11.3 per cent compared with the same month last year
- —Continued buyer reluctance due to increased mortgage rates
Changed environment for market participants
Prospective buyers and property owners face altered framework conditions. As long as interest rate levels keep borrowing costs elevated, the gap between sellers' asking prices and buyers' financial headroom will persist. Against this backdrop, a swift recovery in contract activity is not in sight for the time being.
