Updated November 12, 2026, 4:22 p.m. ET
Reluctance reigns in the real estate market this fall.
Buyers don’t want to pay 7 percent interest on a mortgage, real estate experts say. Sellers do not want to lower their prices. Neither side wins.
The number of pending new home listings, a leading indicator of sales, fell 17% in October to the lowest level recorded that month since 2018, according to Zillow. Researchers expect a bigger drop in November.
“Sellers are reluctant to rent their homes and get prices they don’t like, and buyers are just getting crushed by these mortgage rates,” said Joel Berner, senior economist at Realtor.com. “Everyone is at a dead end.”
Thirty-year mortgage rates have hovered above 7% since the end of September. On the other hand, in the fall of 2021, rates fell below 3%.
Mortgage rates rose dramatically in 2022 and have remained above 6% for most of the past five years. Homeowners who kept rates historically low during the pandemic waited half a decade for rates to drop.
Rates briefly fell below 6% in early 2026, providing a glimmer of hope for sellers and buyers. Then came the war in Iran, and rates rose again.
“We were optimistic at the start of the year that 2026 was going to be our year,” said Kara Ng, senior economist at Zillow. “As the year progressed, it seemed less and less likely.”
With mortgage rates at 7%, buyers are losing purchasing power
Higher interest rates rob buyers of their purchasing power. Those 6% rates in early 2026 gave the average buyer $30,000 more purchasing power than they had a year earlier, when rates hit 7%, Zillow reports. Today, that extra leverage is gone.
To put today’s mortgage rates in context: A typical homeowner with an existing mortgage has an interest rate of about 4 percent, according to a new report from Realtor.com. This mortgage holder would have to pay about $1,100 more each month to buy an average-priced home today with a mortgage rate of 7.3%.
Buyers and sellers have been waiting for mortgage rates to return to 4%. It’s not, and it probably won’t be any time soon.
Mortgage rates are compared to interest rates on 10-year Treasury bills. These rates have reached high levels in recent months, driving up mortgage rates. And they are expected to remain high due to persistent inflation, federal monetary policy and other factors.
“I think mortgage rates are going to remain above pandemic and pre-pandemic levels,” said Daryl Fairweather, chief economist at Redfin. “So I think we just have to adapt to this new reality.”
This means that potential sellers may need to manage their expectations.
Buyers can’t afford as many homes as they could a year ago, let alone five years ago. Their budget seems exhausted. They’ll be less likely to make an offer on a home that needs fresh paint or a new roof. They’ll be looking for bargains on the next block.
If they can’t find housing that fits their budget, they risk waiting on the sidelines, hoping that mortgage rates will eventually come down.
Here are some tips for home sellers in a world of 7% mortgages.
Be flexible on price
A potential home buyer “is in a worse situation” today than at the start of the year, due to reduced purchasing power, Ng said. Even a small concession on price could sweeten a potential sale.
But too many sellers “are anchored to a price that may not be consistent with today’s reality,” Ng said.
One reason for the slow housing market is that landlords are “not lowering their prices,” Fairweather said. “It’s not just buyers who are backing down, it’s also sellers who are backing down. »
Some sellers set a price that is based on comparable sales from years ago when the market was hot. Today, this price may not be realistic.
“As a seller, you have to be willing to accept a price that the market will allow,” said Jessica Lautz, deputy chief economist at the National Association of Realtors. “And that may not be the price that was achieved in a bidding war in 2021.”
Before listing your home, “think carefully about what your ‘exit’ number actually is,” Fairweather said. “You need to price it appropriately and competitively, so you don’t waste your time letting your house sit on the market. »
Do not list work to be renovated
With fewer buyers in the market, real estate experts say, a seller should make extra effort to market an attractive home.
This means hiring a landscaping service, and perhaps a cleaning service, decluttering, and finding a place to store your pets while visiting.
Home buyers are already price sensitive, Fairweather said. They may run away at the first sign of deferred maintenance or neglected repairs, effectively driving up the price.
“‘Move-in ready’ means there are no major expenses, or even minor expenses, waiting for a buyer when they move in,” Fairweather said. “Maybe there’s a house down the street that’s as nice as yours, but they painted the walls.”
Focus on “affordable solutions,” Lautz said. You don’t need to renovate the kitchen. Focus on the easy things.
Keep the buyer happy
When a buyer makes an offer on your home, “your work is not done,” Fairweather said.
Pending sales are being canceled at a higher rate than normal, she said. A buyer may be hesitant to pay the final monthly mortgage payment or fix anything the home inspection revealed.
In these situations, be prepared to negotiate. If the house needs a new roof, “be prepared to pay for something like that” or share the cost, Fairweather said.
Also consider offering an interest rate buydown. This is a financing transaction that reduces the interest rate on the mortgage, at least temporarily. Think of it as a “mortgage subsidy” offered by the seller to the buyer, Investopedia advises.
“Make sure your buyer still feels happy with the home purchase throughout the escrow period,” Fairweather said.
Be patient
If your house isn’t selling, Fairweather said, the problem may not be the price.
Maybe your house is “unique,” she said, and not in a good way: It’s on a busy road, or next to a railroad track, or on a lot the size of a postage stamp.
Homes are now spending more days on the market, Lautz said. Salespeople must learn to be patient.
“Sometimes the strategy is not to set prices low,” Fairweather said. “You just have to wait for the right buyer to come along.”
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