US home prices have fallen for the first time in more than three years, Redfin data show, as mortgage rates above 7% keep buyers on the sidelines and force sellers to accept lower offers. The median US home-sale price was $389,601 for the four weeks ending October 25, 2026, down 0.1% from a year earlier. The fall is small on paper but marks a turning point for a market that has resisted high borrowing costs for years, and it is the second straight weekly drop after a 0.2% fall the week before.

Redfin chief economist Daryl Fairweather summed up the cause in two words: “Mortgage rates.” Freddie Mac’s October 29 survey put the average 30-year fixed rate at 7.24%, down from 7.32% the previous week but well above 6.17% a year earlier. For a typical buyer, that gap adds hundreds of dollars to the monthly bill — enough, in many markets, to stop a purchase altogether.

Key Points

• Median US home-sale price: $389,601 for the four weeks ending October 25, 2026, down 0.1% year on year — the first annual decline in more than three years.
• Average 30-year fixed mortgage rate: 7.24% on October 29, versus 6.17% a year earlier, according to Freddie Mac.
• Median monthly mortgage payment: $2,786, up 10.7% year on year and the second-highest on record in Redfin’s weekly data.
• Pending sales fell 15.9% year on year to the lowest level in Redfin records dating to 2021, with declines in all 50 most populous metros.
• By city: Austin down more than 4% and Seattle down 5.1%, while San Francisco rose about 15% and Pittsburgh about 7%.

What Happened

Redfin’s weekly housing report, published October 29, 2026 and written up by The Washington Post on November 3, shows a market that has finally lost momentum. After years in which limited supply propped up prices even as rates climbed, the national median has now slipped below its level of a year ago.

The more striking figure is the collapse in activity behind the price. Pending sales — homes under contract but not yet closed — fell 15.9% year on year, the lowest since Redfin began the weekly series in 2021. Every one of the 50 most populous metropolitan areas recorded a decline. Fewer people are agreeing to buy at any price, not just at the asking price.

Affordability explains why. The median monthly mortgage payment hit $2,786, up 10.7% from a year earlier. A buyer of the median-priced home now faces a far higher monthly cost than a year ago, even though the headline price has barely moved. Wages have not kept pace, and many would-be buyers are waiting, hoping rates will fall or prices will follow.

Background: How High Rates Froze the Market

The freeze began when borrowing costs rose sharply from 2022. As the Federal Reserve raised rates to fight inflation, mortgage rates climbed from historic lows near 3% to above 7%. Homeowners who had locked in cheap pandemic-era mortgages had little incentive to sell and trade a low rate for a much higher one. That “lock-in effect” choked supply and helped keep prices high even as sales volumes fell.

For a long time, that shortage was enough to offset weaker demand, and prices kept rising, albeit more slowly, through 2024 and 2025. The latest figures suggest the balance may finally be shifting: more sellers are listing, more homes are sitting unsold, and buyers faced with near-record payments are pushing back on price.

US Home Prices Fall: Where Prices Are Dropping — and Where They Are Not

The national decline hides sharp regional contrasts. Austin, Texas, where a pandemic-era building boom added much new supply, saw prices fall more than 4% year on year. Seattle fell 5.1%, as high prices collided with elevated rates and weaker demand.

At the other end, San Francisco rose about 15% and Pittsburgh about 7%. In markets where supply remains tight or higher-income buyers can absorb higher rates, prices can still climb. That is why a single national figure can mislead: a buyer in Seattle faces a very different market from one in Pittsburgh.

What the cities share is the same affordability squeeze. Even where prices rose, monthly payments have jumped because of rates. That is why pending sales fell everywhere, including where headline prices were still increasing. Demand, not just price, is the story of this autumn.

Reactions and Quotes

Fairweather’s two-word verdict — “Mortgage rates” — matches what housing economists have warned for months: until rates fall meaningfully, incomes rise faster, or prices adjust further, sales are likely to stay weak. Freddie Mac’s small weekly improvement, from 7.32% to 7.24%, is welcome but modest, leaving rates more than a full point above a year ago.

Why It Matters

Housing is the largest asset most American families own, and it drives much consumer spending. When prices fall, homeowners feel less wealthy and may spend less. When sales fall, estate agents, builders, lenders and home-improvement retailers all feel the pinch. A prolonged slump can therefore drag on the wider economy even if the stock market rises.

For first-time buyers, a price fall is not entirely bad news. After years of being priced out, a modest decline — with any future fall in rates — could open a door that has been closed. The catch is that payments are still near record highs, so a 0.1% price drop alone does almost nothing for affordability. Buyers need much lower prices or much lower rates, or both, before the maths works again.

What Happens Next

Three things will decide whether this is a turning point or a blip. First, mortgage rates: a drift lower could revive pending sales quickly, as after previous rate dips; rates staying above 7% point to further price falls. Second, supply: more listings would give buyers choice and bargaining power, but the lock-in effect means many owners will stay put. Third, the official data: November contract figures will show whether they confirm Redfin’s signal.

Frequently Asked Questions

How much did US home prices fall? The median sale price was $389,601 for the four weeks ending October 25, 2026, down 0.1% year on year, according to Redfin.

Why are prices falling? Mortgage rates: the average 30-year fixed rate was 7.24% on October 29, 2026, versus 6.17% a year earlier, pushing the median monthly payment to $2,786.

Are prices falling everywhere? No. Austin fell more than 4% and Seattle 5.1%, while San Francisco rose about 15% and Pittsburgh about 7%.

Are sales also falling? Yes. Pending sales fell 15.9% year on year to the lowest in Redfin records since 2021, with declines in all 50 most populous metros.

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