Existing Home Sales: Is a Fall Rebound Still Possible?

• 🏠 Existing home sales dropped 15.3% year-over-year in September 2025, reaching one of the lowest points since the housing crash.
• 📉 Mortgage rates remain above 7%, discouraging both buyers and sellers from entering the market.
• 🔒 Inventory shrank 3.5% from August to September due to rate-lock-in effect among homeowners.
• 🔍 Pending home sales fell to an index of 75.7 in September, signaling weak Q4 closings.
• 💡 Creative strategies like buyer rebates and 1% listing fees are helping clients deal with affordability and pricing challenges.

Existing Home Sales: Is a Fall Rebound Still Possible?

Existing home sales have failed to bounce back this fall, despite modest declines in mortgage rates and a surge of late-summer listings. The housing market now has fixed affordability problems. Buyers and sellers are stuck, and there is less and less inventory in many cities. If you want to make good decisions that make you money, you need to understand why the housing market is slow. It might be time to think differently about how you buy or sell.

📉 Current State of Existing Home Sales

The existing home sales market is at one of its weakest levels in over a decade. According to the most recent figures from the National Association of Realtors (NAR), existing-home sales fell to a seasonally adjusted annual rate (SAAR) of 3.89 million units in September 2025. This marks a:

• 0.7% decline from August 2025
• 15.3% decline compared to September 2025

These figures show that any hopes for a fall rebound have largely fizzled. Even places that usually see seasonal increases in the fall, like family communities outside cities, have slowed down. The numbers show a bigger pattern. We are not just seeing a cooldown. We are seeing a slowdown caused by affordability, how people feel, and deep economic problems.

Demand is slow, but this drop in sales does not necessarily mean home values are falling. Instead, the lack of sales comes from cautious buyers with little cash, and sellers who are stuck and will not move.

🏦 Mortgage Rates: Sticky, Not So Sweet

Mortgage rates are still a big problem for the housing market to get better. They have come down a little from their highest point in 2023. But they still stay near 7.1% for a 30-year fixed mortgage, according to the Mortgage Bankers Association.

Let’s put that into perspective:

This near doubling of monthly mortgage costs over three years has made it impossible for many people to buy homes. And existing homeowners who got rates under 3% during the pandemic are very unwilling to sell. This is because their new mortgage payments would go up a lot.

Furthermore, refinancing is the lowest it has been in a long time. Many banks see low demand because current rates offer no reason to refinance, unless it’s to pay off other debts or take out home equity.

So, the usual reasons that make homeowners upgrade, like needing more space or cashing out equity, are delayed. What happens? The housing market is stuck in one place.

🎯 Affordability Crunch Still Rules

The heavy burden of unaffordability continues to stop home sales. The NAR’s Housing Affordability Index shows that affordability is still at or near a 30-year low as we get to the end of 2025. This measure looks at average home prices, how much people earn, and interest rates. And the result is clear: homes cost more now than almost any time since the late 1980s.

Consider the numbers:

• In many large cities, a median-priced home now costs over 36% of pre-tax household income when you add in principal, interest, taxes, and insurance (PITI).
• That is more than standard lending limits, especially for first-time buyers and FHA-backed mortgages.

This affordability problem affects every part of buying a home:

• Cash for down payments is harder to save when inflation is high and rent is high.
• Monthly payments are barely affordable for large parts of the middle class.
• Sellers often do not want to cut prices much, because they worry about buying a new home themselves.

But new ways, like agent commission rebates, can make this easier. With a 1% rebate on a $500,000 home, buyers can get $5,000 at closing. This can cover inspection fees, appraisal gaps, or high closing costs.

🏘️ Inventory Is Tightening Again

One of the main things about the housing market now is the constant lack of homes for sale. You might think slower sales would mean more homes for sale. But that has not happened.

Redfin says active listings dropped 3.5% from August to September 2025. This was a big drop after a good increase in summer.

Here’s what’s driving low inventory:

• 92% of current homeowners with mortgages have interest rates under 5%, according to Redfin. This means they are essentially “rate-locked.”
• Homeowners either cannot afford or do not want to give up their 3% mortgage for one that costs twice as much.
• And many people who want to sell wait to move until spring 2025. This is because they worry about less interest and lower offers now.

Fewer “for sale” signs keep prices higher than they would be otherwise, even though buyer interest is weak. This also makes homes sit unsold. They stay on the market for a long time and get low offers, or no offers at all.

🧍Who’s Buying in Fall 2025—And Who’s Not?

Not all buyers are created equal in this market. Here’s how different groups are behaving:

Cooling Groups:

• First-time buyers: Cannot afford homes. Many keep renting or move back in with family.
• Investors: Stepping back because money costs more and rental profits are smaller.
• Flippers: Stopping because renovations cost more and resale value is not clear.

Active Buyers:

• Buyers with a lot of home value: These homeowners use bridge loans, cash-out refinancing, or home equity lines of credit to buy a new home before selling their old one.
• Buyers with cash without strings attached: Many choose to downsize or move with no money problems.

What does this mean? How much money people have, and how clever they are, decide who is still buying and closing deals.

⌛ Pending Sales: A Window Into Q4

Pending home sales show what might happen with the market soon. This is because they are based on agreements made for future closings. But the Pending Home Sales Index does not make people feel good.

In September 2025:

• The NAR’s Pending Home Sales Index fell to 75.7.
• This marks an additional 1.2% slide from August 2025.

That level is getting close to the lowest points during the pandemic. This suggests that closings through November and December might also stay below average.

This is another warning sign that buyers are not finishing the deal, even after doing the first paperwork like getting preapproved or looking at homes.

💼 Why Mortgage Apps Aren’t Translating into Closings

A worrying pattern is showing up: buyers are starting the process but not completing it. Mortgage application data shows people want to buy, but finished sales tell a different story.

Consider this:

Conversion rates are declining monthly. Why?

• Surprise at the price during the home tour or inspection
• Appraisal problems that do not match the asking prices
• Hoping for lower rates or more homes to choose from
• Tired of deciding, and not sure about the economy

Getting preapproved is not the sure thing it once was. Many buyers are now careful watchers, not sure buyers.

🔍 What About New Construction?

Not many used homes are for sale, so many buyers are looking at new construction. But there are things you gain and things you lose.

Builders are eager to attract buyers, and they’re offering:

• Mortgage rate buydowns (some as low as 5.5% for the first few years)
• Appliance and yard packages
• Closing cost help

And new builds now make up over 30% of all homes for sale in some areas, like cities in the Southwest and Sunbelt.

However, new homes that are not custom-built often cost 10%–20% more than similar used homes. These higher prices can quickly cancel out what builders give to help, unless buyers plan on keeping the home for a long time.

And most new construction neighborhoods come with homeowner association rules and fees, Mello-Roos taxes (in California), and construction noise for years. It is a classic “you get what you pay for” situation, with good and bad points.

🧩 Locked Sellers, Hesitant Buyers: The Market Gridlock Explained

The market is stuck. This happens because of different needs:

• Sellers do not want to lose their low-rate mortgages.
• Buyers do not want to pay high prices at high interest.
• Homes for sale often need work, or their prices do not match what buyers can spend.

Until rates go down or there is a real change in how much homes cost, this standoff might continue. Both groups are playing a waiting game—hoping the other blinks first.

🧠 Smart Seller Strategies for a Stalled Market

In a slow market, sellers who do well are smart about their plans. Here are proven tips for 2025:

• Price your home based on what similar homes have sold for, not what you hope for.
• Be ready for your home to be on the market longer. In many cities, it can take three times longer than in 2021.
• Offer credits instead of making big repairs to save time.
• Use a low-commission seller model like our 1% full-service listing and offer a better deal than others.
• Show that the home is ready to move into and looks good from the street. Buyers want “easy” when they are worried about money.

And also, presentation is very important. Professional staging and photography make a big difference in how many people click on your listing and come to see the home.

💵 Buyer Advantage: Rebates, Concessions & Credits

Buyers might see high prices, but the slower market means there are less obvious reasons to buy that you can use:

• Seller-paid 2-1 mortgage buydowns
• Money towards closing costs or updated appliances
• Flexible closing times

One good idea? Buyer agent commission rebates. In most states that allow rebates, that means 1%–1.5% of the sale price given back to you at closing.

✅ Bonus tip: Use all or part of your rebate to cover:

• A difference in appraisal value
• New furniture or fresh paint
• Moving costs or other new home costs

🧮 Sample Savings: 1% Listing vs. Traditional Agent Fees

Agent fees continue to be one of the largest transaction costs in any home sale. Traditional real estate agents charge 5%–6% in total commission. But that does not help sellers in a tough market.

Here is what sellers can save using a simpler 1% listing model:

*Plus buyer-side commissions and subject to minimum fee of $3,000.

Using a commission model that saves money, and having a good listing price, could make the difference between your home sitting on the market and you moving on with your life.

✅ How We Help Buyers and Sellers Deal With This Market

We offer smarter tools, clear pricing, and full honesty. This is true whether you are listing your home or shopping for your first.

Our Promise:

• 1% full-service seller listings with MLS showing, professional photos, and experienced agents
• Real rebates that buyers can get cash for (where allowed by law)
• Quick support, and no hidden fees

📌 The main point: In a tough market, the right ways to save money and the right tools are not just good to have. They are needed for most deals to happen.

🔗 Citations

National Association of Realtors. (2025). Existing Home Sales Data – September 2025.

Mortgage Bankers Association. (2025). Weekly Mortgage Application Survey.

Redfin. (2025). Housing Market Data Center.

National Association of Realtors. (2025). Housing Affordability Index.

National Association of Realtors. (2025). Pending Home Sales Index, September 2025.