Real Estate Market Trends: Mortgage Rates, Home Prices, and Buyer Momentum – September 2025 Update

The housing market continues to shift under the weight of economic uncertainty, mortgage rate fluctuations, and new regulatory frameworks.

This week’s data offers both encouraging signals and cautionary trends, with buyers, sellers, and industry professionals all navigating a complex environment.

Mortgage Rate Volatility and Buyer Power

The Federal Reserve cut its benchmark rate to 4.25% on September 17, the first reduction since late 2024.

Surprisingly, mortgage rates did not follow suit. After briefly dipping to 6.13% — an 11-month low — 30-year fixed rates have rebounded, ranging between 6.35% and 6.47%.

For buyers, the mid-6% range appears to be the new normal heading into the fourth quarter. While not the dramatic drop many hoped for, it’s still more favorable than summer peaks — with the median monthly mortgage payment now $200 lower than in May.

That equates to roughly $20,000 in added purchasing power, an important lever for buyers weighing their timing.

Home Sales & Pricing Trends: A Market Reset?

August pending home sales rose 4.0% month-over-month, the strongest performance since March 2025 and far better than economists anticipated.

The Midwest led the surge, recording an 8.7% increase thanks to relative affordability compared to other regions.

At the same time, home prices are finally showing signs of softening. The national median list price declined 0.9% year-over-year in early September — the first annual drop in two years.

Price per square foot also declined, signaling that affordability pressures are forcing sellers to make concessions.

Inventory is up nearly 10% nationwide, offering buyers more choices and reducing competitive bidding.

Regional Spotlight: Midwest Strength, Sun Belt Challenges

The Midwest continues to shine as one of the most resilient housing markets.

• Missouri saw 5.4% annual price growth, supported by strong sales activity and rising inventory.
• Buyers in this region benefit from a rare mix of affordability and stability.

In contrast, Sun Belt markets — once the darlings of pandemic-era migration — are cooling.

• Cities like Houma, LA, and Lake Charles, LA, face projected price declines of 7–8% through 2026.
• Parts of Texas are also expected to soften, reflecting a necessary correction after years of overheated growth.

For buyers, this suggests new opportunities in regions where prices are adjusting downward.
For sellers in those markets, realistic pricing will be critical to securing deals.

Industry Shakeups: Tech & Brokerage Consolidation

The real estate industry is evolving structurally, with major mergers and technology integrations redefining the landscape.

• Compass announced a $1.5 billion all-stock acquisition of Anywhere Real Estate, bringing powerhouse brands such as Century 21, Coldwell Banker, Sotheby’s, Corcoran, and Better Homes & Gardens under one roof.
  • With 340,000 agents worldwide, the combined company signals a new era of brokerage consolidation.
• MLSs and proptech firms are rapidly expanding AI-driven tools.
  • Bright MLS launched a new suite of products.
  • RealReports partnered with Restb.ai to deliver “appraisal-grade” property insights.

For Realtors and brokers, these technologies are quickly shifting from optional add-ons to essential tools.

Regulatory & Economic Crosscurrents

Beyond pricing and technology, regulations and economic pressures are reshaping how transactions unfold.

NAR Settlement

One year into implementation, mandatory buyer representation agreements and new commission transparency rules are fully in effect.

While many feared shrinking commissions, buyer’s agent fees actually ticked up slightly to 2.43% on average.

Key takeaway: agent-client relationships now require greater transparency and documented agreements.

FinCEN Rules

Beginning December 1, 2025, new reporting requirements will apply to all-cash transactions involving entities or trusts.

The reporting process includes over 150 questions, demanding far more detail than standard closings.

Real estate attorneys and agents should prepare for more complex due diligence.

Economic Headwinds

Slowing job growth (+22,000 jobs in August vs. 75,000 forecast), rising unemployment (4.3%), and persistent inflation (CPI +2.9%) are weighing on buyer confidence.

For many households, uncertainty about job security is delaying purchase decisions.

The Bottom Line

The real estate market is in a transition phase.

• Mortgage rates are stabilizing in the mid-6% range.
• Pending sales are showing renewed life.
• Prices are softening for the first time in two years.

Buyers now benefit from more inventory and negotiating power, while sellers face a more competitive environment.

Industry professionals must adapt quickly, balancing new technologies, regulatory compliance, and shifting buyer psychology.

Key takeaway: Opportunity exists on both sides of the table — but success depends on timing, strategy, and informed guidance.