10/09/2026
ARE WE WATCHING THE BEGINNING OF ANOTHER HOUSING CRASH?
Something happened to the housing market over the last several weeks, and if you're trying to buy or sell a home right now, you've probably already felt it.
The Federal Reserve raised its benchmark interest rate again in September. Bank prime moved to 7%. Meanwhile, the average 30-year mortgage rate has climbed for six consecutive weeks, going from 6.65% in August to 7.28% by October 1.
That may look like a couple of numbers on a financial report until you understand what it does to an actual family trying to buy a house.
At 6.5%, the principal and interest payment on a $300,000 mortgage is approximately $1,896 per month. At 7.5%, it jumps to roughly $2,098. That's another $202 every month for the exact same house, before property taxes, homeowners insurance, utilities, groceries, gasoline or anything else a family has to pay for.
Now look at what happened next.
Pending home sales across the country fell 8.5% in September compared with a year ago, the largest year-over-year decline since September 2023. More sellers are cutting their asking prices while buyers are pulling back.
I'm watching it happen from the other side of the front door too. Homes that should be getting attention are sitting. Sellers are reducing prices. Buyers are looking, thinking and walking away. It feels like somebody flipped a switch.
And here's the part that should concern homeowners.
When interest rates rise, buyers lose purchasing power. When buyers can no longer afford yesterday's prices, houses take longer to sell. Sellers eventually begin competing for the buyers who remain. Price reductions follow, and if those reduced prices become closed sales, those sales become tomorrow's comparable properties.
That is how pressure can eventually move from monthly payments into property values.
Nobody knows today whether this becomes a housing crash. But pretending nothing is happening would be just as foolish. Mortgage rates are now at their highest level in nearly three years, the Fed has not announced some magical rate cut coming next month, and another rate increase in December is still being discussed.
Meanwhile, ordinary Americans are already getting squeezed from every direction. The cost of borrowing is higher. Housing is harder to afford. Fuel and everyday expenses eat into household budgets. Existing homeowners don't want to give up the mortgage rates they already have, and would-be buyers are looking at monthly payments that simply don't work.
