With mortgage rates firmly busting through the 7% mark, over one-fifth of home sellers ended up cutting their listing price during September, Realtor.com said.

But the good news in this situation — these sellers are willing to take less money rather than exit the market entirely, with under 6% electing to delist their home.

However, it does mean inventory is rising, increasing 5.4% versus last September to over 1.16 million homes for sale.

On Sept. 1, the conforming 30-year fixed rate mortgage averaged 6.749%, data from Optimal Blue found. By two weeks later, it broke through the 7% ceiling and continued to climb for the most part. On Sept. 28, this product was at 7.31%.

"Recent moves in mortgage rates weighed on the housing market in September," a commentary on the data from Jake Krimmel, senior economist at Realtor.com, said.

Since the Iran War began, the 30-year has increased by a full percentage point.

"The year-over-year picture is worse: after running below 2025 levels through July, rates are now more than 70 basis points above last year, a gap that has widened quickly because rates were falling last September and are rising this one," said Krimmel.

Inventory is now growing at a time of the year when the pace usually slows, leading to more price reductions, Krimmel said.

During September, 20.8% of listings had price reductions, the Realtor.com data claimed, a gain of 0.5% over August and 0.9% versus a year ago.

By region, only 15.2% of Northeast listings had a price cut, followed by 20.7% in the Midwest, 21.6% in the South and 22.8% in the West.

The median listing price was $419,250, down 1.2% versus August and 1.4% from September 2025. But when compared with the pre-pandemic month of September 2019, they are over 34% higher. It makes 11 consecutive months of annual list price declines.

"September's housing data shows that buyers are gaining leverage, but higher mortgage rates are limiting how much of that opportunity they can use," said Danielle Hale, chief economist at Realtor.com, in the main press release. "Inventory is improving and more sellers are adjusting prices, yet the decline in pending sales makes clear that affordability remains a central constraint as the fall season gets underway."

In her commentary on mortgage rates last week, Kara Ng, a senior economist at Zillow Home Loans declared "high borrowing costs can erode those off-season deals."

Taking the opposite viewpoint was Judi Kutner, Florida Realtor and mortgage finance expert at Gorilla Movers: "Once someone decides the home is right, a 6.8% rate becomes a monthly payment problem to solve rather than a reason to sit out the market."

New listings did drop by 1.7% from August to 394,830.

For housing market participants in October, they need to monitor how sellers respond to even tougher conditions than today, Krimmel said.

"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," Krimmel said. "It is worth watching how deep the discounts get, whether some sellers resort to multiple cuts in quick succession, and if that actually results in more signed contracts or just leaves homes sitting longer."

Krimmel added other signs of stagnation, such as the divergence between pending sales trends and inventory growth, should be kept an eye on in October.