Real Estate Activity Remains Strong in September

September usually signals a slowdown in real estate, but this year was different. Activity stayed “unseasonably strong,” largely fueled by lower mortgage rates and a robust stock market, according to a report from Zillow.

New listings in September saw a 3% rise compared to the same month last year, defying the typical autumn dip. Interestingly, the slight 2% decrease from August was also out of character for this time of year. Over the last seven years, publicly traded stocks have typically declined around 9% as fall approaches.

Kara Ng, a senior economist at Zillow, noted that the unusual strength in September can be attributed to the combination of lower mortgage rates and higher stock market prices.

“This might be an ideal time for buyers,” Ng explained. “There tends to be less competition compared to spring, allowing for more time to find the right home.”

Total inventory rose by 14% year-over-year, though it only dipped slightly by 1% from August to September. Still, the level of inventory remains 18% below what it was before the pandemic hit.

Market trends, however, differ from city to city. Buyers in major urban areas tend to have a clearer advantage, the report suggests.

A year ago, only six of the largest 50 metropolitan areas in the U.S. were classified as buyer’s markets, but that number has now increased to 15.

Cities like Miami, New Orleans, Austin, Jacksonville, and Indianapolis are currently favorable for buyers. This shift is mostly due to a significant rise in new housing developments in recent years.

Conversely, in the Northeast and West regions—including places like Buffalo, Hartford, San Jose, San Francisco, and New York—sellers hold more leverage, thanks to more stringent land-use restrictions faced by builders.

The report by Zillow underscores how sensitive both buyers and sellers remain to even small shifts in mortgage rates.

The average interest rate for a 30-year fixed mortgage was 6.26% in mid-September, a drop from 6.58% the previous month, according to data from Freddie Mac. There’s potential for further declines if the Fed takes action, but that’s not set in stone.

Zillow’s estimates show that, assuming a 20% decrease, the typical monthly mortgage payment would hit $1,812 in September, compared to a typical home price of $364,891 in the U.S.

Nationwide, 26.2% of properties listed in September had price reductions, which is a slight uptick from 24.9% during the same time last year.