The latest monthly data shows that mortgage rates rose rapidly in September, dealing a heavy blow to the U.S. housing market.

According to data from the National Association of Real Estate Brokers (NAREB), the number of completed sales of existing homes – that is, transactions of second-hand homes that have already been signed – decreased by 7.3% compared to August and by 11.3% year-on-year.

This data reflects the situation of buyers who went out to view properties in September. That month, the average interest rate for 30-year fixed mortgage loans soared significantly. According to the data from Mortgage News Daily, the interest rate was around 6.8% at the beginning of the month and rose to 7.6% by the end of the month.

NAR Chief Economist Lawrence Yun ( Lawrence Yun ) stated in a statement: "Although employment growth and increased income can support home purchases, the affordability of housing is more easily affected by changes in mortgage rates."

Regionally, sales have declined across the United States, with the largest month-over-month declines in the South (-8.2%) and the West (-9.2%). The South is usually the most active market, while the West has the highest housing prices.

Residential construction also suffered in September. Both the start of new single-family homes and building permits declined significantly, with the declines exceeding analysts' expectations. According to data from the U.S. Census Bureau ( U.S . Census ), the number of residential starts fell by 4.56%, equivalent to an annual rate of 859,000 units. This is the lowest level since September 2025. Building permits, which serve as an indicator for future construction, also decreased by 4% that month.

Senior economist Ben Ayres ( Ben Ayers ) stated in a report to investors: "We expect the sluggish state of residential construction activity to continue until 2027. Many builders are still trying to digest current projects, and the widespread adoption of price cuts and incentive measures has eroded profit margins. As the market adapts to higher interest rate environments, residential starts, especially for single-family homes, are likely to remain low for most of next year – reduced residential construction will have a mild drag on economic growth."

The National Association of Homebuilders ( National Association of Home Builders , abbreviated as NAHB ) announced on Tuesday that the October Homebuilders Confidence Index had dropped to its lowest level in 14 years. Current sales, future sales expectations, and the number of homebuyer visits have all declined, with the number of visits reaching its lowest point.

NAHB Chief Economist Robert Dietz ( Robert Dietz ) stated in a statement: "The housing market is still under the pressure of supply-side constraints and significant affordability challenges. Demand is still there, but higher mortgage rates, persistently high construction costs, and weakening consumer confidence are causing more buyers to choose to wait and see."