Pending Home Sales Just Hit the Lowest Level on Record; Buyers Are Pulling Back; Why That Could Create Opportunity for the Ones Still Shopping

Pending Home Sales Just Hit the Lowest Level on Record; Buyers Are Pulling Back; Why That Could Create Opportunity for the Ones Still Shopping

October 21, 2026 | Michael Belfor

The housing market just delivered one of the ugliest demand numbers we have seen in years.

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Pending home sales fell 7.3% in September.

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That was far worse than economists expected.

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And the National Association of Realtors’ pending-home-sales index dropped to 66.0 — the lowest reading since the series began in 2001. Reuters

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That means contract activity is now at a 25-year low.

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The reason is not complicated.

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Mortgage rates moved sharply higher.

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Affordability got worse.

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And buyers backed away.

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But here is the part I think active buyers should understand:

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When other buyers disappear, negotiating leverage can improve for the ones who remain.

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I. PENDING SALES FELL MUCH MORE THAN EXPECTED

Pending home sales measure signed contracts on existing homes.

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That makes the report a useful early indicator of future closings.

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In September, pending sales fell 7.3% from August.

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Economists had expected a much smaller decline.

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Sales were also down 11.3% from a year earlier.

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And every major region of the country showed weaker contract activity. Reuters

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That is not a normal monthly wobble.

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It is a meaningful drop in demand.

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II. MORTGAGE RATES ARE THE MAIN REASON

The average 30-year fixed mortgage rate has been hovering around 7.40%.

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That is near the highest level we have seen in almost three years. Reuters

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When mortgage rates move from the mid-6% range into the 7% range, the monthly-payment difference is significant.

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For some buyers, that means a lower purchase price.

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For others, it means pausing entirely.

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That is exactly what the pending-sales data reflects.

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The National Association of Realtors pointed directly to higher mortgage rates as the primary reason buyers pulled back. Reuters

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There is still demand for housing.

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There is just much less demand at today’s payment.

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III. THIS IS WHERE THE MARKET GETS INTERESTING

Weak demand sounds bad.

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For sellers, it can be.

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For the industry, it absolutely is.

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But for a buyer who is still qualified and comfortable with the payment, fewer competing buyers can be useful.

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Think about the difference between:

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A home receiving eight offers.

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And a home receiving one.

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A seller with three backup buyers.

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And a seller whose property has been sitting for 45 days.

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Those are completely different negotiations.

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This is why I keep saying that a bad housing market does not automatically mean a bad time for every buyer.

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The opportunity depends on the individual property.

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IV. PRICE REDUCTIONS ARE BECOMING MORE COMMON

The slowdown is already showing up in listing behavior.

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MarketWatch reported that nearly 44% of listings had experienced a price reduction by mid-October. MarketWatch

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That is a very large share of the market.

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Again, that does not mean every home is suddenly cheap.

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Some sellers started too high.

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Some properties have problems.

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Some markets are weaker than others.

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And the best homes can still move quickly.

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But more price reductions tell you that sellers are adjusting.

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That gives buyers something they have not had consistently for years:

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A reason to negotiate.

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V. ASK FOR MORE THAN A PRICE CUT

When a seller becomes motivated, I do not automatically want to use every dollar of negotiation on price.

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Depending on the loan and transaction, the buyer may benefit more from:

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Seller-paid closing costs.

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A temporary rate buydown.

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A permanent rate buydown.

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Repairs.

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A price reduction.

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Or some combination.

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Suppose a seller is willing to give $20,000.

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The right question is not:

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“How much lower can we make the purchase price?”

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The right question is:

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“What use of that $20,000 creates the best financial outcome for this buyer?”

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For a payment-sensitive buyer, a rate buydown may matter more.

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For a cash-sensitive buyer, closing-cost help may be more valuable.

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For another buyer, price may still be the best answer.

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The money should solve the actual problem.

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VI. DO NOT ASSUME THIS MEANS A HOUSING CRASH

A 25-year low in pending sales sounds dramatic.

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And it is.

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But weak transaction volume does not automatically mean home prices collapse.

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Most existing homeowners are not distressed.

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Many have significant equity.

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Many have low-rate mortgages.

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And many simply will not sell unless they get a price they are comfortable with.

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That can keep prices surprisingly sticky even when sales volume falls.

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So I would not look at the pending-sales report and conclude:

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“Home prices are about to crash.”

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The cleaner conclusion is:

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Buyer demand has weakened sharply.

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And that can shift negotiating power on individual properties.

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THE BOTTOM LINE

Pending home sales just fell to the lowest level since the index began in 2001. Reuters

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That is a serious sign of how badly higher mortgage rates are hurting demand.

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For the housing industry, that is painful.

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For sellers, it can be frustrating.

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But for a qualified buyer who is still comfortable purchasing?

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It may create opportunity.

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The key questions are:

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How long has the home been listed?

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Has the seller already reduced the price?

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Are there competing offers?

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What concessions might the seller consider?

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And how can we structure the financing to get the most value from those concessions?

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You do not need the entire housing market to improve.

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You only need the right seller, the right property, and a financing structure that works.

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Pending Home Sales Hit a 25-Year Low — What Buyers Should Know

Pending home sales fell 7.3% in September to the lowest level since the index began in 2001. Learn why weaker demand may create more negotiating opportunities for active homebuyers.

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