It’s been a pretty solid September for the housing market, and I'm feeling optimistic. The latest report from the National Association of REALTORS® (NAR) shows that existing-home sales jumped by 1.5% last month, hitting a seasonally adjusted annual rate of 4.06 million. This is exactly what we’ve been hoping for: as mortgage rates started to dip, more buyers felt comfortable making a move. So, yes, lower mortgage rates are indeed lifting home sales.

Housing Market Update: Home Sales Rise Fueled by Lower Mortgage Rates

This uptick is a welcome sign, especially after a period where affordability has been a major hurdle for many. For those of us who live and breathe real estate, seeing more transactions happen means a healthier market overall. It signals that buyers are back, and sellers are finding their homes moving faster. It's a complex dance, but right now, the music is playing a bit more cheerfully.

What's Driving This Positive Shift?

Honestly, it boils down to a few key factors, and the biggest one is definitely mortgage rates. In September, the average 30-year fixed-rate mortgage dipped to 6.35%, down from 6.59% in August. Even a small decrease like this can make a big difference in monthly payments, making homeownership feel achievable again for a lot of people. It's like finally seeing a clear path after a period of foggy uncertainty.

Dr. Lawrence Yun, NAR's Chief Economist, put it perfectly: “As anticipated, falling mortgage rates are lifting home sales. Improving housing affordability is also contributing to the increase in sales.” I couldn't agree more. When the cost of borrowing money for a home goes down, it directly impacts how much house people can afford. This affordability boost is a crucial piece of the puzzle.

Inventory Levels: A Mixed Bag, But Still Improving

One of the big concerns in recent years has been the lack of homes on the market. While we're not quite back to pre-pandemic levels, the inventory situation saw a slight improvement in September. Total housing inventory rose by 1.3% month-over-month to 1.55 million units. This gives us a supply of 4.6 months of unsold inventory.

This increase, while not massive, is significant. It means buyers have a bit more choice, and competition, while still present, might not be as cutthroat as it was. Dr. Yun also pointed out that inventory is matching a five-year high, which is encouraging. However, he also made a really insightful point: “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales.” This is important because it means the homes hitting the market are generally well-maintained and not part of a fire sale, which helps keep prices stable.

Home Prices: Still Climbing, But at a Slower Pace

Despite the increase in sales and inventory, home prices are still on the rise. The median existing-home price for all housing types reached $415,200 in September. This marks the 27th consecutive month of year-over-year price increases.

It's important to note that while prices are up, the rate of increase is more moderate than we've seen in some of the hotter periods. Personally, I see this as a good thing. When prices climb too quickly, it can price out a whole generation of buyers. A more steady, sustainable increase is healthier for the long-term market.

Breakdown by Housing Type and Region:

Let's dive a bit deeper into what's happening:

Single-Family Homes:

• Sales of single-family homes increased by 1.7% month-over-month to an annual rate of 3.69 million.
• Year-over-year, single-family home sales are up 4.5%.
• The median price for single-family homes climbed to $420,700, a 2.3% increase from the previous year.

Condominiums and Co-ops:

• For condos and co-ops, the sales picture was a bit different. There was no change month-over-month or year-over-year, with sales holding steady at 370,000 units annually.
• The median price for these properties saw a slight dip of 0.6% year-over-year, landing at $360,300. This could be due to a variety of factors, including buyer preferences or specific market conditions in cities where these types of homes are more prevalent.

Regional Trends:

The housing market is never a one-size-fits-all story, and the regional data for September really highlights this:

• The West saw a significant 5.5% surge in sales month-over-month, indicating strong demand in that region, even though year-over-year sales were flat. The median price here is the highest at $619,100.
• The South showed consistent growth with a 1.6% increase in sales month-over-month and a healthy 6.9% jump year-over-year.
• The Northeast also experienced positive growth, with a 2.1% rise in sales month-over-month and a 4.3% increase year-over-year, along with the second-highest median price at $500,300.
• The Midwest was the only region to see a slight decrease in sales month-over-month (-2.1%), but still managed to achieve a 2.2% year-over-year increase. Interestingly, it has the lowest median price at $320,800, making it potentially a more affordable option for many buyers.

Who's Buying and How Are They Doing It?

Some interesting insights come from the REALTORS® Confidence Index for September:

• Homes are taking a little longer to sell: The median time on market was 33 days, up from 31 days last month and 28 days a year ago. This isn't necessarily a bad thing; it could mean buyers are taking their time to find the right home and aren't feeling pressured by frantic bidding wars.
• First-time homebuyers are making a comeback: 30% of sales were to first-time homebuyers, which is up from 28% in July and 26% in September 2024. This is fantastic news for the future of homeownership.
• Cash is still king for some: 30% of transactions were cash sales, showing that some buyers have the financial flexibility to bypass mortgages entirely.
• Investors are stepping back a bit: 15% of transactions were by individual investors or second-home buyers, down from 21% last month. This suggests that perhaps individual buyers, with less investment capital, are re-entering the market now that rates have softened.
• Distressed sales remain very low: Only 2% of sales were distressed properties (foreclosures and short sales), which is a testament to the generally healthy financial state of homeowners and the market.

As a real estate professional, I see these numbers as a sign of a maturing market. We're moving away from the extreme frenzy and into a more balanced environment where both buyers and sellers can find success. The decrease in mortgage rates has unlocked a lot of pent-up demand, and it’s particularly encouraging to see more first-time buyers getting a foot in the door.

My Takeaway: A Path Towards Stability

The September housing market update paints a picture of progress. The return of slightly lower mortgage rates has clearly energized the market, leading to increased sales. While prices are still climbing, the pace seems more sustainable, and the growing inventory, though still needing more volume, offers buyers more choices.

For anyone looking to buy or sell, this is a crucial time to pay attention. The market is dynamic, and understanding these trends can give you a real advantage. I believe we're on a path towards greater stability, which is good for everyone involved. It’s about finding that sweet spot where affordability meets opportunity.

The housing market can feel like a constantly shifting puzzle, and understanding the current housing market trends is crucial whether you're dreaming of buying your first home, selling your place, or just curious about your neighborhood's value. Right now, nearly 29% of U.S. homebuyers are still opting to pay with cash, a figure that has remained remarkably steady compared to last year, suggesting a resilient segment of the market even as other factors begin to shift.

This might sound like a lot of cash, and honestly, it is. But digging a little deeper reveals a more nuanced picture. I've spent years immersed in the world of real estate, watching cycles ebb and flow, and I can tell you that while cash is still king for a significant portion of buyers, it's not the whole story. In fact, if you're someone who relies on a mortgage, there's actually some encouraging news brewing.

Housing Market Trends: Nearly 1 in 3 Buyers Still Opt for All-Cash Deals in 2025

Why is Cash Still So Prevalent?

Before I dive into the reasons, let me share a thought. For a long time, we saw a surge in cash purchases. This was largely because mortgage rates skyrocketed, making borrowing money incredibly expensive. When you can avoid those hefty monthly interest payments, especially on the kind of money buying a home takes, paying cash just makes sense if you have it. Redfin's data from October 2025 shows that the peak for all-cash offers was in late 2023 and early 2024 when mortgage rates were hovering in the high 7% range.

Think about it: if you have the funds, why wouldn't you skip the interest and potentially secure a deal faster in a competitive market? It's a strategic move for many. However, as mortgage rates have started to dip – currently averaging around 6.27% – the allure of paying cash has lessened for some. Lower rates mean lower borrowing costs, which can make taking out a mortgage more attractive again.

Furthermore, the market has become a bit less frantic. We saw a significant cooling from its “red hot” phase. When there are fewer bidding wars and less pressure to “win” at all costs, buyers who need mortgages don't feel as compelled to fork over cash just to beat out someone else.

The Rising Tide of Down Payments

While the share of all-cash buyers is holding steady, another significant trend is the record-breaking median down payment. In August 2025, the typical U.S. homebuyer put down a whopping $70,000. That's a 6.1% increase from the previous year. In percentage terms, the median down payment now sits at 18.6% of the purchase price, the highest it's been in August since 2013.

Why the jump? Well, home prices have been climbing, so naturally, you need to put down more money when the overall cost is higher. However, Redfin's analysis shows that down-payment growth has actually outpaced home-price growth. This tells me something interesting is happening.

One key reason, in my experience, is that affluent buyers are playing a bigger role in the market. When housing costs are high, those with substantial financial resources are more likely to enter the market and make larger down payments. They can absorb a higher price point and still make a significant down payment. It's also possible some wealthier individuals are choosing to make large down payments rather than paying cash as mortgage rates have eased slightly.

Beyond the wealthy, I'm seeing a trend with “move-up” buyers. These are homeowners who are selling their current property and leveraging the equity they've built up to put a substantial down payment on their next home. This strategy can significantly lower their mortgage amount and monthly payments. Also, lenders themselves might be encouraging larger down payments to mitigate their risk in a market that still has some uncertainties.

A Welcome Shift for First-Time Buyers

This rise in larger down payments, combined with slightly lower mortgage rates and a less competitive market, is actually a breath of fresh air for many first-time homebuyers. Kathy Scott, a Redfin Premier agent in Phoenix, shared something I hear often: “First-time buyers have more opportunities than they did when the market was hot; they’re no longer competing against 10 other offers from people who are either paying in cash or shelling out a 50% down payment.”

This means buyers who are stretching to afford a home can breathe a little easier. They're not necessarily facing instant rejection if they can't compete with all-cash offers or massive down payments. They can take their time, find a home that truly fits their needs, and potentially even negotiate on price. Kathy's advice is spot-on: “Now is a great time to start building equity if you’re planning to stay in your new home for five to 10 years.”

However, I need to acknowledge that not everyone has significant cash reserves. Andrew Vallejo, another Redfin Premier agent in Austin, TX, highlights the other side of the coin: “the people who are buying are those who are financially comfortable, secure in their jobs, and have money ready and waiting in the bank for a down payment.” He shared an example of a buyer who liquidated stocks to make a $400,000 down payment on an $800,000 home. That's certainly a different reality for many.

But even with this trend, the flip side is also true. For some first-time buyers with more modest savings, perhaps $10,000 or $15,000, finding a home with a small down payment used to be nearly impossible. Now, in some areas, with less competition, these buyers are finding that their smaller down payments are more feasible.

Where the Trends Play Out: Metro-Level Snapshot

It's important to remember that the housing market isn't a one-size-fits-all phenomenon. Trends can vary wildly from city to city. Here’s a quick glimpse from the August 2025 data covering 40 major metro areas:

All-Cash Purchases:

• Highest Prevalence: West Palm Beach, FL (43.4%), Cleveland, OH (42.1%), Miami, FL (39.2%). These areas often see a strong presence of investors and buyers with significant liquid assets.
• Lowest Prevalence: Oakland, CA (18.8%), San Jose, CA (19.1%), Seattle, WA (20.5%). These are typically high-cost-of-living areas where even buyers with strong finances might opt for mortgages to spread the cost.
• Biggest Increases in Share: Baltimore, MD; Riverside, CA; Providence, RI. This suggests a growing segment of cash buyers in these particular metros.
• Biggest Declines in Share: Milwaukee, WI; New York, NY; Cincinnati, OH. This implies a shift towards more mortgage-dependent buyers in these locations.

Down Payments (in Dollars):

• Largest: San Jose, CA ($408,000), San Francisco, CA ($400,000), Anaheim, CA ($300,000). These are some of the priciest housing markets in the nation, demonstrating the sheer scale of investment required.
• Smallest: Virginia Beach, VA ($9,000), Pittsburgh, PA ($23,000), Cleveland, OH ($27,000). These areas represent more affordable markets where a smaller down payment can go a long way.
• Biggest Increases: Providence, RI; Chicago, IL; Washington, D.C. Markets where demand is strong and home prices are rising could be seeing larger down payments.
• Biggest Declines: Riverside, CA; Seattle, WA; Denver, CO. This could indicate a cooling market in these areas, or perhaps a shift towards smaller homes or first-time buyers.

Down Payments (in Percentage):

• Highest: Anaheim, CA (25%), San Francisco, CA (25%), San Jose, CA (25%). Again, in very expensive areas, buyers often need to put down a larger percentage to make the numbers work.
• Lowest: Virginia Beach, VA (3%), Las Vegas, NV (9.4%), Tampa, FL (9.8%). These markets often have more lenient down payment requirements for certain loan types.
• Biggest Increases in Percentage: Providence, RI; Orlando, FL; Columbus, OH. This points to buyers actively trying to reduce their loan principal, perhaps due to higher interest rates or a desire for lower monthly payments.
• Biggest Declines in Percentage: Miami, FL; Denver, CO; Warren, MI. This reversal could suggest a relaxation of down payment requirements or a shift in buyer demographics.

My Take: Navigating the Current Climate

From where I stand, the current housing market trends present a fascinating duality. On one hand, the persistence of cash purchases shows a deep pool of financially secure buyers still actively participating. On the other, the slight easing of mortgage rates and a less cutthroat environment offer renewed hope and opportunity for those who rely on financing.

For potential buyers, my advice has always been to get pre-approved for a mortgage and understand your budget thoroughly. Don't get discouraged by headlines. Focus on your local market. Talk to an experienced real estate agent who understands the nuances of your area. They can offer invaluable insights and guide you through the process, whether you're bringing cash to the table or seeking a mortgage.

For sellers, understanding these trends is equally important. If you're in a market where cash offers are common and robust, you might be able to expect a quicker sale. If your market is seeing more mortgage-dependent buyers, presentation, price, and flexibility might be key to attracting offers.

Let's cut to the chase: based on what I'm seeing from countless economic reports and talking to folks who know the real estate world inside and out, 2026 does indeed look like it has the potential to be a buyer's housing market, or at least a much more balanced one, than we've seen in years. This doesn't mean a crash is coming, or that sellers will be left holding the bag, but the scales could be tipping back towards those looking to purchase a home. A combination of slightly lower mortgage rates and a slow but steady increase in available homes for sale is creating a scenario where buyers might find themselves with a bit more breathing room and negotiation power.

Will the Housing Market Shift to a Buyer’s Market in 2026?

It's been a wild ride in the housing market. For a good while there, if you were selling a home, things seemed almost too easy. Homes were snatched up almost as soon as they were listed, often with multiple offers above the asking price. If you were a buyer, well, it felt like trying to grab a winning lottery ticket – stressful and often disappointing. But as I look ahead to 2026, the picture appears to be changing. We're not talking about a sudden free-for-all for buyers, but rather a gradual shift towards a market where you might actually have a comfortable seat at the table. Let me walk you through why I think this is the case.

The Big Picture: A Market Finding Its Footing

After years of scorching hot sales, where homes felt like they were disappearing from listings as fast as they appeared, we're starting to see some tell-tale signs of change. Reports from major players like Fannie Mae, the National Association of Realtors (NAR), and data analysts at Zillow are all pointing towards a significant pivot by 2026. They suggest that the total number of homes sold in the U.S. could see a healthy jump. Think around a nearly 10% increase from the year before.

What's driving this belief? Two main things: mortgage rates that are predicted to ease up a bit, and the inventory of homes for sale slowly but surely growing. Now, I want to be clear – this isn't expected to be a sudden free-fall in prices or a market where sellers are desperate. Instead, economists are forecasting a more balanced market. This balance is exactly what buyers have been hoping for. They'll likely have more options to choose from and a better chance to negotiate terms that work for them.

It's a stark contrast to just a couple of years ago. We saw mortgage rates that were incredibly low, which, combined with a severe lack of homes, supercharged the seller's advantage. Now, as rates are a bit higher but expected to dip slightly in the coming years, the dynamic starts to shift.

Will Mortgage Rates Finally Become Our Friend Again?

This is the million-dollar question, or maybe I should say, the hundreds-of-thousands-of-dollars-less-per-monthly-payment question! Mortgage rates have been the stubborn roadblock for many aspiring homeowners. When rates hover in the mid-6% range, as they have been, it significantly impacts how much house you can afford.

However, the projections for 2026 are looking more encouraging. Leading housing finance agencies are predicting that the average 30-year fixed mortgage rate could dip back down to around 5.9% by the end of 2026. Imagine what that means for your monthly payment on a $400,000 loan. A drop from, say, 6.8% to 5.9% could save you hundreds of dollars every single month.

To give you a clearer picture, look at this chart. It shows how mortgage rates have swung over the years and where they might be headed.

This gradual cooling of rates is key. It’s not going to happen overnight, and it's tied to broader economic trends, like inflation cooling down. If inflation stays stubbornly high, we might not see rates drop as much as predicted. But the current trajectory suggests a much more favorable borrowing environment for buyers in 2026. This improvement in affordability could unlock demand from people who have been waiting on the sidelines, but it’s not expected to be so dramatic that it sends sellers into a frenzy to list their homes.

Inventory and Sales: More Homes, More Choices

Another crucial piece of the puzzle is the number of homes available for sale – what we call inventory. For a long time, inventory has been critically low, which is why sellers had so much power. But things are starting to change here, too. The supply of homes for sale is beginning to rebound.

• Months' Supply: We often talk about “months' supply of inventory.” This means if no new homes were built or listed, how long would it take to sell all the homes currently on the market? For a balanced market, experts typically look for around 6 months of supply. We've been well below that for a while. By mid-2025, we're seeing predictions that the national average will be closer to 4.7 months' supply. By 2026, many areas are expected to reach or even exceed the 5-month mark. While still not a buyer's absolute dream scenario in every location, this is a very significant improvement and gives buyers more breathing room.
• Sales Volume: As inventory grows and mortgage rates become more manageable, we can expect more homes to sell. Forecasters are predicting a noticeable rebound in existing home sales. We could see an addition of hundreds of thousands of transactions annually compared to the last few years. This increase in activity means more homes are changing hands, which is generally a sign of a healthier, more accessible market.

This table gives a snapshot of how inventory has looked and where it might go, helping you visualize the shift:

(Data from FRED and aggregated forecasts; balanced market generally considered around 6 months.)

The key takeaway here is that while inventory is growing, it's not expected to flood the market. This gradual increase is what helps foster that buyer leverage without causing a dramatic price collapse.

Home Prices: Steady Growth, Not Soaring Heights

Now, let's talk about prices. Will 2026 be the year we see home prices plummet? My professional opinion, based on the data and economic forecasts I've reviewed, is no. We are not looking at a housing market crash. Instead, we're anticipating much more modest price growth.

Think along the lines of 1% to 4% appreciation nationally over the course of the year. This is a far cry from the double-digit, sometimes even 15%-20% surges we witnessed in the peak of the pandemic market. This slower, more sustainable price appreciation is actually a sign of a healthier market. It means that the market is stabilizing rather than overheating.

For example, national median home prices might sit somewhere in the $420,000 to $430,000 range by 2026. This is still an increase, but at a pace that is more in line with historical norms and wage growth for many people. Builders are also offering more incentives, and while demand is still present, it's tempered by affordability concerns, which helps keep price growth in check.

I've seen historical data that really drives this point home. This table shows the trend:

(Source: FRED St. Louis Fed; forecasts averaged from NAR/Zillow.)

As you can see, after a period of rapid growth, the pace is expected to moderate significantly. This means if you're buying, you won't feel like you're constantly trying to catch a runaway train.

Regional Differences: It's Not the Same Everywhere

It’s crucial to understand that the U.S. housing market is not a single, uniform entity. What happens in one state, or even one city, can be quite different from what's happening across the country. This is especially true when we talk about 2026 potentially being a buyer's market.

• Sun Belt Softening: Areas that saw immense price growth during the pandemic, particularly in states like Florida, Texas, and parts of the Southwest (often referred to as the “Sun Belt”), might see more softening. Some forecasts suggest these regions could experience modest price declines or flat growth. This is often due to a combination of increased new construction and a slight cooling of demand as the allure of remote work shifts for some. For buyers in these locales, 2026 could offer genuine opportunities.
• Midwest Stability: Conversely, many areas in the Midwest might continue to see steady, albeit slower, price appreciation. These markets often have more stable economies and a better balance between supply and demand, making them less prone to dramatic swings.
• Hot Spots Exist: Don't assume all “hot” markets will suddenly become buyer paradises. Major hubs with strong economies and limited land for new development, like parts of the Northeast or certain California cities, may continue to experience price growth, though likely at a more controlled pace than in recent years.

So, if you're looking to buy, doing your homework on specific local markets will be more important than ever. Don't rely solely on national headlines.

What This Means for You: Advice for Buyers and Sellers

So, with all this information, what should you do?

For Buyers:

• Get Pre-Approved and Stay Informed: Knowing your budget is crucial. As rates move, your pre-approval amount might adjust, but having that foundation is key. Keep an eye on local inventory. Apps and local real estate agent insights are invaluable here.
• Negotiate Smartly: In areas where inventory is higher or prices are softening, don't be afraid to negotiate. You might be able to ask for seller concessions, like help with closing costs or even a rate buy-down, which can save you money upfront and over the life of the loan.
• Credit Score is King: Continue to focus on maintaining a good credit score. Even small improvements can lead to better loan terms, especially as rates fluctuate.

For Sellers:

• Price Realistically: The days of wildly overpricing and expecting multiple offers might be behind us in many areas. Work with your agent to price your home competitively based on current market conditions. A home that sits on the market too long can become “stale.”
• Consider Incentives: If your home isn't moving as quickly, think about offering incentives. This could be anything from covering appraisal fees to contributing to a buyer's mortgage rate buydown. It shows you're serious about making a deal.
• Stage for Success: Presentation still matters. A well-staged, move-in ready home will always attract more serious buyers, especially in a market with more options.

For Investors:

• Focus on Rental Demand: In areas where homeownership remains a challenge due to affordability, rental markets can be strong. Look for locations with jobs and a growing population.
• Value Plays: Some regions, particularly in the Midwest, might offer properties at a more attractive price point, potentially leading to better returns on investment properties.

The Bottom Line: A Tentative Yes for Buyers

All signs point to 2026 being a more favorable year for housing market buyers. We're likely stepping into a period where the market feels more balanced, with more homes available and slightly more manageable mortgage rates. This shift should provide more opportunities and better negotiation power for those looking to purchase a home.

However, it's not a guaranteed free-for-all. Affordability is still a significant hurdle for many, and regional differences will remain pronounced. The key will be for buyers to be informed, patient, and strategic. Don't expect a market crash, but do expect a market that offers more choices and a fairer playing field than we've seen in recent years. As always in real estate, understanding your local market and working with knowledgeable professionals will be your greatest assets.