The housing market hits mile 25 🏃

The housing market started the year full of promise after 4 years of stagnant sales activity. My prediction newsletter cited the consensus view that we’d see rates in the low to mid 6% range by year-end. The freeze that began in 2022 would continue to thaw. Sales and affordability would improve.

Rates briefly dropped below 6% in February, just in time for the spring selling season. The stage was set.

Then the conflict in Iran sent oil prices soaring, and inflation data followed. Mortgage rates inched up all spring and summer, finally reaching ~7.5% earlier this month.

The market sputtered through the spring selling season. Then this fall it hit a buzz saw: a sudden half-point jump in rates. We now head into the end of the year like a runner at mile 25 of a marathon: sweaty, tired, sore, but standing.

So why hasn't this market weakness translated into significantly lower home prices?

For one, American homeowners are sitting on record levels of home equity. Most aren't under financial pressure to sell, and many are locked into mortgage rates below 4%. With little incentive to move, many sellers can afford to wait rather than slash prices.

Seattle vs. Eastside, September 2026

NWMLS, single-family homes only (no condos)

What stands out 📌

Months of supply hit 3.8 in Seattle and 5.2 on the Eastside, the highest since late 2011.
Inventory is at 2011 levels: 1,985 active listings in Seattle and 1,865 on the Eastside.
Closed sales were the second-lowest September in 21 years in Seattle (413) and the third-lowest on the Eastside (373). Both are down about 17% from last year.
New listings keep coming while sales slow. The Eastside had 2.7 new listings per pending sale, up from 1.5 a year ago.
Prices have eased, not broken. Seattle’s median is $924,950 (−2.5%) and the Eastside’s is $1,545,000 (−7.3%), back to September 2023 levels.
The Eastside is where buyers are negotiating. Homes sold at 96.0% of original list price, and days on market was 21, the longest September since 2011.