Surging mortgage rates chilled the housing market in September, forcing sellers to slash prices at historic levels to revive slipping demand.
Nationally, the share of listings with price cuts reached 20.8%, up 0.9 percentage points year over year, exceeding 2025 levels for the first time in 2026, according to the latest Realtor.com® monthly housing market trends report. This marks the highest September price-reduction rate since 2018 and the highest overall for any month since October 2022.
This surge in price cuts aligns with broader housing market shifts, including accelerating inventory growth and plunging pending sales.
Simply put, as mortgage rates topping 7% push would-be buyers to the sidelines, leaving homes to pile up on the market, motivated sellers are willing to capitulate on price just to get to the closing table.
“A lot of the people selling right now have to sell rather than simply choosing to sell—because of a job relocation, divorce, debt, or another life event—so they have to meet buyers where they are,” Russell Faucette, principal broker and co-founder of Omada Real Estate in Salt Lake City, tells Realtor.com.
According to the data, this trend is national in scope: All four regions and 36 of the 50 largest metros are now running above their year-ago price-cut shares.
“Demand rarely picks up much this time of year regardless, but the rate environment and underlying geopolitical uncertainty made sure the housing market’s fall stall came early this year,” notes Realtor.com senior economist Jake Krimmel.
West leads the U.S. in price cuts
While Realtor.com analysts previously expected to see market softness in the Midwest, the West proved to be September’s weakest regional market, recording the largest year-over-year increase in price cuts, which surged 1.8 percentage point to 22.8%.
Conversely, price reductions remained least common in the undersupplied Northeast (15.2%) and Midwest (20.7%), while the South settled in the middle (21.8%).
Unsurprisingly, given the regional storyline, Western markets led the nation in price cuts at the metro level. In Salt Lake City, one-third of all active listings last month came with a discount, followed by Denver (31.5%) and Portland, OR (31.3%).
Faucette, the Salt Lake City broker, says that rising interest rates have made local homes less affordable, sapping buyer demand and leading to a buildup of inventory.
Consequently, buyers now have significantly more options, as well as more negotiating power.
“Sellers are no longer just competing against the market; they’re competing against the house down the street,” says Faucette. “If they want to be the home that sells instead of their neighbor’s, they have to be competitive on price, condition, and terms.”
In Denver, sellers are facing a similar high-supply, low-demand reality, with the metro currently sitting at more than four months of inventory.
“Sellers who priced their homes based on where the market was a year or two ago, are increasingly being forced to confront where the market actually is today, and where it’s going tomorrow,” Michelle Schwinghammer, real estate agent at West + Main Homes in Denver, tells Realtor.com. “Price reductions are, in many cases, an attempt to catch up with the market late, rather than getting ahead of it from the get-go.”
Why price cuts aren’t cutting it
Despite widespread reductions, brokers maintain that simply slashing the asking price fails to address the broader affordability concerns.
“This is much more interest-rate-driven than price-driven,” says Faucette. “Home prices may be softening, but affordability hasn’t necessarily improved. Roughly speaking, a 1-percentage-point increase in mortgage rates can reduce a buyer’s purchasing power by around 10%.”
For example, a buyer who could afford a $500,000 home at a 6% interest rate may have similar purchasing power at around $450,000 at 7%. The Utah broker stresses that home prices have not fallen enough to offset that difference.
“So even though sellers are reducing prices, it hasn’t necessarily brought more buyers into the market,” adds Faucette. “In many cases, higher rates have actually reduced the buyer pool even further.”
Schwinghammer says that in her conversations with potential buyers, the prevailing consensus is that everything is too expensive to make a major financial move, and modest price cuts alone are not moving the needle.
“It’s not just the price of the house. Insurance costs have become outrageous, while gas, energy, and grocery prices are putting enormous pressure on household budgets just to cover basic necessities,” says the agent. “A price reduction on a house doesn’t solve an affordability problem that extends well beyond the mortgage payment.”
Whether effective or not, price cuts are here to stay so long as interest rates remain elevated.
“I do expect prices to continue to soften,” says Faucette. “I also think we’ll see seller concessions become even more important—particularly concessions that allow buyers to buy down their interest rate and lower their monthly payment.”
Schwinghammer notes that sellers who lack the luxury of waiting for the market to improve feel like they have no choice but to trim prices.
“That includes buy-before-you-sell borrowers, people relocating out of state, sellers facing financial pressure, including short-sale situations, and others who have a specific reason they need to transact this year,” she says. “Whenever a seller has to sell, the market has a way of making the pricing conversation much harder to ignore.”
Delistings flatline
Delistings, traditionally another key marker of a struggling housing market, held steady at 5.6% in September at the national level, signaling that sellers were not pulling homes off the market en masse.
However, headline numbers mask dramatic regional divergence.
In Salt Lake City, sellers are delisting at high rates as active inventory continues to expand.
“That shows there are two very different groups of sellers in today’s market,” says Faucette.
“Sellers who need to sell are adjusting their price, offering concessions, and doing what they need to do to compete. Sellers who don’t have to sell are much more likely to pull the home off the market rather than accept a lower price or terms they aren’t comfortable with.”
Likewise, in Denver, Schwinghammer says that delistings have been elevated all year and they are only increasing as the market moves into the slower fall and winter seasons.
“Many of those sellers are likely taking their homes off the market for now, planning to try again in the spring,” says the agent. “That may not be a great strategy, particularly if inventory continues to rise and rates do as well next year.”
What’s in store for the market
Looking ahead, Krimmel says it’s important to monitor how sellers respond to even tougher market conditions.
“This is the time of year when leverage usually shifts more toward buyers, but unexpectedly higher mortgage rates means even fewer buyers are showing up than normal this fall,” he notes.
Key benchmarks to keep an eye on include the depth of price cuts, whether some sellers slash prices multiple times in quick succession, and whether that approach actually yields more signed contracts.
“Also, pending sales and inventory growth have been diverging for a few months now, a sign of stagnation that will be worth following in October,” he says.
