---
title: US Home Asking Prices Dip and Rental Demand Jumps 19% as Mortgage Rates Hit 7.4%
description: Pending home sales fell in all 50 of the largest US metros and a record 22% of sellers cut their asking price, according to Redfin.
author: Darie Nani (Editor-in-Chief)
date: 2026-10-16T11:30:11.781Z
updated: 2026-10-16T13:02:10.814Z
canonical: https://www.sovereignmagazine.com/article/us-asking-prices-fall-mortgage-rates-7-4-redfin-zillow
image: https://cdn.nanimediahouse.com/pexels-an-interracial-couple-meets-with-a-real-estate-agent-to-inqu-8962336.jpg
categories: Real Estate
content_type: News
region: United States
publication: Sovereign Magazine
schema_type: Article
---

The median asking price of a US home for sale was $396,881 in the four weeks ending Oct. 11, 0.3% lower than a year earlier and the first year-over-year decline since March, [according to Redfin](https://www.redfin.com/news/housing-market-update-asking-prices-decline-october).

Freddie Mac's 30-year fixed rate [averaged 7.40% as of Oct. 15](https://www.freddiemac.com/pmms), unchanged from a week earlier and up from 6.27% a year ago. Redfin says the weekly average rate hit a three-year high on Oct. 8. At 7.4%, Redfin puts the median monthly mortgage payment at $2,777, up 8.8% from a year earlier and higher than at any point in its records except the previous week. Redfin attributes the increase to high rates combined with home prices that are still rising.

The median sale price rose 0.5% from a year earlier to $391,116, Redfin's slowest growth since March. In August, Redfin's median sale price was still [2.2% above the year before](https://www.sovereignmagazine.com/article/housing-supply-six-year-high-buyers-market-2026).

A record 22% of sellers with active listings cut their asking price, up from 20.9% a year earlier and the highest share in Redfin's weekly data, which begins in 2021. Redfin says more sellers are lowering prices as they accept that price growth is slowing. Among the 50 most populous metros, Redfin recorded the biggest drop in sale prices in Seattle, down 6.3% from a year earlier.

## Pending Home Sales Fell in Every One of the 50 Largest Metros

Homes going under contract totaled 286,531 in the four weeks, down 12.7% from a year earlier. That is close to the lowest level in Redfin's records, which go back to 2021 and include the end of 2023, when mortgage rates were near 8%. Seattle had the steepest drop in pending sales, 26%. Redfin says it is the first time in three years that pending sales fell year over year in every metro it analyzes.

Pending sales rose 1.5% from the previous week, which Redfin said was "perhaps thanks to rates easing ever-so-slightly." The daily average mortgage rate fell to 7.45% on Oct. 14 from 7.61% about a week earlier, according to Redfin.

## Zillow Says Higher Borrowing Costs Are Sending Would-Be Buyers to Rentals

Zillow said on Oct. 15 that rental demand rose 19.2% from a year earlier in September, measured by its renter demand index, which tracks engagement on Zillow's rental listings. "Elevated mortgage rates have pushed home shoppers straight into the arms of rentals," said Kara Ng, senior economist at Zillow.

The typical US rent was $1,932 a month in September, up 2.7% from a year earlier, while Zillow's typical monthly payment for a new buyer, on a typical home with 10% down and a 30-year fixed loan including taxes and insurance, rose 5% to $3,037. The median household spends 26.3% of its income on a new rental, against 41.3% for a new homeowner, according to Zillow.

Zillow's demand index for [single-family rentals](https://www.sovereignmagazine.com/article/hud-fha-loans-build-to-rent-communities) rose 21.6%, more than double the 10.1% rise for multifamily rentals, and the typical single-family rent of $2,266 is $771 a month below Zillow's buyer payment.

In San Jose, where Redfin recorded a 4.8% fall in sale prices, rental demand rose 82.5%, the biggest increase Zillow recorded, and rent rose 8.3%. In Austin, rental demand rose 49.3% while rent rose 0.7%, which Zillow attributes to new construction keeping supply in step with demand.

## FAQ

**Q: Are we in a buyers or sellers market right now?**
By Redfin's count, the US had 4.2 months of supply in the four weeks ending Oct. 11, up from 3.8 a year earlier. Redfin considers 4 to 5 months of supply balanced, which puts the national market in the balanced range by that measure.

**Q: Where are home sale prices still rising fastest?**
Among the 50 most populous metros, Redfin recorded the biggest year-over-year increases in median sale price in San Francisco, up 18.1%, Detroit, up 9.4%, and West Palm Beach, Florida, up 7.8%, in the four weeks ending Oct. 11.

**Q: Where is rental demand falling?**
Zillow's renter demand index fell from a year earlier in September in several metros, including Louisville, down 6.2%, Baltimore, down 6.1%, Washington, D.C., down 5.6%, and Cleveland, down 5.5%.