Market Trends: Lower Mortgage Rates Delay Start of the Slow Season

The U.S. market at a glance

• Median Home Price: $364,891 (down 0.1% from last year, but 0.26% higher than a month earlier)
• Homes for Sale: 1% fewer active listings compared to a month ago
• Time on market for a typical home: 27 days, unchanged from a month earlier
• Average rate on a 30-year fixed mortgage: 6.38%, up slightly from the previous month (as of Oct. 6, 2025)
• Market Heat Index: Still a neutral market nationally, with more local markets, including Nashville, Pittsburgh and Houston, moving into buyers’ favor

A dip in mortgage rates in early September appeared to draw buyers and sellers back to the market after a lackluster August, providing a bit of a boost to what is traditionally the start of the slow season in real estate. Sellers also may have been responding to a stock market surge in September, even as inflation climbed and job growth slowed. Mortgage rates have since ticked up, while home prices remain flat as we enter the last hurrah for home shopping in 2025 before the holiday season begins.

What to know if you’re planning to shop or list 

Buyers face less competition

September saw fewer homes selling above their list price than a year ago, a sign that bidding wars among buyers are becoming less frequent. A year ago, 30.5% of homes sold above their listing price; this year, the share was 27%. Meanwhile, the share of sellers cutting prices edged up by 0.4% from August to 26%, and more markets have become buyer’s markets.

The map below highlights the share of listings with a price cut in major metros.

There are more new listings than usual for this time of year

After dropping 7.2% in August, new listings fell by just 2% in September. Last year, new listings in September fell nearly 8%. The smaller than expected drop in new listings gives buyers more choices than they had a year ago. New listings usually fall sharply into the winter months, so shopping earlier will give you more choices.

Keep an eye on interest rates

The market usually responds in advance to expected rate cuts by the Federal Reserve Board, which controls a key rate that influences mortgage rates. But rates are hard to predict, and fluctuate depending on what’s happening in the wider economy. One way to track changes in rates and how they affect how much home you can afford is BuyAbility℠, a tool from Zillow Home Loans that gives you a personalized estimate of affordability based on your financial circumstances and current interest rates.

Find homes in your budget with BuyAbility℠

Loading

Regional highlights

Among the nation’s 50 top metros, 26 saw an annual increase in home values. 

The chart below shows how home values have changed in major U.S. metros since a year ago.

The number of buyer’s markets has more than doubled 

A year ago, six of the nation’s 50 largest metros were buyers markets; this September, buyers have the edge in 15 metros. The strongest buyer’s markets in the country are Miami, New Orleans, Austin, Jacksonville, and Indianapolis.

The hottest markets for sellers are in the northeast, while metros in Florida and Texas, once white-hot seller’s markets, are solidly in buyer territory. That’s due, in large part, to a surge of new construction in those areas in 2024. The strongest seller’s markets are Buffalo, Hartford, San Jose, San Francisco, and New York.

Below, you see where buyers and sellers have the advantage, and where they’re on equal footing.

Metro spotlights

Raleigh, N.C.. Compared to this time last year, the number of homes for sale in Raleigh has jumped 36%, the largest increase among the nation’s 50 largest metros. The bump in the number of homes for sale has turned last year’s seller’s market into a neutral one this year. The typical home in Raleigh is worth $437,337, down 2.7% over the past year. Homes go from list to pending in about 29 days.

Seattle. After a long stretch as a seller’s market, a surge of new listings put Seattle into neutral territory over the summer, giving buyers and sellers here equal power. The typical home in Seattle is valued at $744,272, down .43% from August. Homes go from list to pending in around 20 days.

Cleveland. While home appreciation remains flat nationally, homes in Cleveland racked up 4.6% appreciation over the past year, highest among the nation’s 50 largest metros. The price appreciation indicates growing demand for homes, and a more competitive landscape for buyers. The typical home in Cleveland is valued at $244,289, and finds a buyer in 10 days.

What’s next? 

Fall can be a sweet spot for buyers since there’s less competition and more homes for sale than there’s likely to be by year’s end. Sellers who don’t sell by the holidays may be more open to negotiating concessions on price, closing costs and mortgage rate buydowns. Your agent can help you craft an offer that’s appropriate for your local market. If you’re struggling with affordability, check out down payment assistance programs, which can lower the cost of buying.

Sellers, meanwhile, should put the best face possible on their listings to help them stand out to buyers. That includes listing your home on the Multiple Listing Service, where research found that homes sell faster and for more money, and providing immersive experiences online so home shoppers can get the clearest picture of your home. If you’re in a buyer’s or even a neutral market, be prepared for buyers asking for concessions on closing costs and rate buydowns. A local agent can help you price your home to sell, based on your market dynamics.