Three things to watch in the US housing market this September

Another tough month for the U.S. housing market has come to an end, marked by weeks of shrinking demand and rising borrowing costs, but experts are still holding out hope that things might take a turn for the better in September.

Either that, or they might get worse.

Three things will tell us what American homeowners and buyers can expect this month, according to Jake Krimmel, a senior economist at Realtor.com. One, delistings: whether disgruntled sellers will continue taking their properties off the market, or whether they will accept that the market has changed since the pandemic.

Two, price cuts: whether sellers, facing low demand, will slash their original asking prices to attract reluctant buyers. And three, geography: whether the regional differences that have characterized the market in recent years will continue dissipating, as suggested by the latest data.

A Chilly Late-Summer Market: What August Data Tells Us

With rising mortgage rates and still-climbing home prices, the U.S. housing market came to something of a slowdown in August, according to the latest data.

Pending home sales fell 0.2 percent year over year last month for the first time since November 2025, according to Realtor.com. While the decline might appear minimal, it marked the end of an eight-month streak of annual gains that peaked at 4.1 percent in May.

Contract signings—the final part of a home purchase—also fell 3.7 percent last month compared to a year earlier, marking the second straight drop in signings since higher mortgage rates started weighing on buyers.

Homes spent a median of 60 days on the market, three days longer than in July but unchanged from a year ago.

These figures show that Americans continue struggling with affordability issues and uncertainty surrounding the U.S. economy in the shadow of the ongoing war in Iran, which has brought mortgage rates back up from 5.98 percent in late February to 6.66 percent in August, according to the latest reading by Freddie Mac.

“Mortgage rates have climbed over 20 points since early July, at the time of year when activity typically winds down rather than ramps up,” Krimmel said in a statement shared with Newsweek, adding that the temperatures reached across the country this summer did not help revive sales.

“The U.S. just suffered through two of the hottest months on record—hardly ideal house-hunting weather. So there were already seasonal housing market headwinds, and the rate backdrop isn’t helping matters,” he added.

“Monthly mortgage rates have now risen for six straight months, from a 2026 low of 6.05 percent on average in February to 6.67 percent in August. The year-over-year rate advantage has disappeared: As recently as June, rates were running more than 30 basis points below year-ago levels; by August, they were running roughly 10 basis points above,” Krimmel said.

“Regardless of whether it’s due to dog days of summer seasonality or a real signal, housing activity is slowing for now,” he continued.

Buyers See Positive Development: Fewer Delistings, Higher Inventory

While buyers might not be in the right mood to receive it, there was some good news for them in the August housing market.

Sellers’ listing prices continued falling, even though they did so at a slower pace than in July. The national median list price was $424,500 in August, down 1 percent from July and 1.3 percent from a year earlier. It marked the 10th consecutive month of annual list-price declines, but the pace of the decline was roughly half of July’s 2.4 percent drop.

At the same time, 20.4 percent of active listings had a price reduction, up 0.4 percentage points from July and more or less the same compared to a year earlier.

Not only are sellers lowering their price expectations, but they are no longer withdrawing from the market as they did last year, when many preferred to delist their properties rather than sell them for less than they wished to make. Delistings were down 12.6 percent year over year in August, following annual declines of 8.3 percent in June and 4.7 percent in July.

“Price cuts, pending sales and delistings together can tell you whether sellers are satisfied, panicking or somewhere in between,” Krimmel said.

In August, sellers showed “more patience than they did during last year’s late-summer delisting wave. That difference is helping the market avoid a repeat of 2025’s more severe seller pullback, at least for now,” he added.

Sellers’ willingness to stick to the market despite the current headwinds is showing up in the number of active listings, which was up 3.6 percent year over year to 1,140,000 in August, the fastest annual growth rate so far this year.

Even so, national inventory remained 11.1 percent below typical pre-pandemic levels, highlighting that the country is still in the throes of a chronic housing shortage.

September House-Hunters Warned: ‘Moving in the Wrong Direction’

Krimmel warned that there was also some “bad news” for buyers in August. “Price cuts and pending sales are now moving in the wrong direction,” he said.

“The national August price-cut rate is now running slightly above last year’s level for the first time in 2026, and pending sales just went negative year over year for the first time in eight months. Both are signs of weakened buyer demand in the face of higher mortgage rates at the wrong time of the year,” Krimmel explained.

Experts will continue looking at three things this month: “First, whether the delistings gap versus 2025 holds or if a September spike shows up, and whether it’s concentrated in certain metros,” Krimmel said.

“Second, price-cut behavior and strategy. So far this year, sellers have cut less often and less deeply, with repeat cuts nearly halved from last July and overall discounts at their smallest since 2022,” he added.

“Sellers may start to get more desperate in September and subsequent months when mortgage rates are likely to remain higher than they were at this time in 2025,” the economist continued. “Third, geography—particularly growing softness in the Midwest and Northeast where inventory and price cuts are on the rise.”

The Midwest and Northeast, two regions where the housing shortage is most acute, escaped the kind of price corrections faced by the South and partially the West in recent years, which have much higher inventory levels and faced dwindling demand after the end of the pandemic.

In line with these trends, price cuts were least common in the Northeast (14.1 percent) and Midwest (19.6 percent) in August and most common in the South (21.4 percent) and West (22 percent), according to Realtor.com. But the Northeast and Midwest remained above their respective year-ago price-cut rates by 1.2 and 0.8 percentage points, respectively, while the South and West nearly closed their gaps below last year’s pace—signaling that the regional divide in the U.S. housing market might become less pronounced.

Median list prices fell 3 percent in the Northeast, 2.3 percent in the South and 2.1 percent in the West, while they were flat in the Midwest. On a price-per-square-foot basis, the Midwest rose 1.8 percent, while the Northeast (-0.7 percent), South (-2.8 percent) and West (-1 percent) declined.

Contact Newsweek editors on this story: John Fitzpatrick and Shakeema Edwards.