09/19/2026
The Fall real estate market is about to collide with higher interest rates. How will the consumer respond? Tune into Let's Talk Real Estate this morning at 10:00 central on 97.7 FM, 970 AM, or streaming live and podcast on Wmay.com following Sam Madonia's Sam on Saturday. Call 217-629-7970 with your questions.
Special guest today Keith Kinney with 217 Nuisance Wildlife Control. As the seasons change wildlife gets on the move looking for a cozy place to live. Don't let it be your home.
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Weekly Observations September 19, 2026: “The Highest Mortgage Rates of the Year Heading into the Fall Market Impact to be seen”
The reaction of consumers to higher interest rates in the past has been mixed.
With a typical supply of homes for sale giving home buyers multiple choices creating no sense of urgency, our market has experienced a burst of activity by buyers wanting to purchase before rates went higher. Without the stress of a low inventory of homes for sale many prospective buyers would take a laissez-faire attitude until higher rates forced their hand if they really wanted to purchase.
Based upon current activity with a rising but still low inventory a burst of activity has not materialized. The 74 homes going under contract this week edged up from 72 the prior week. Both anemic for this time of year.
Meanwhile the number of homes for sale in the MLS went up to 454 active listings from 442 the prior week and in Sangamon County the 245 active listings were up from 232 the prior week. Although roughly 33% of normal in the MLS and 27% of normal in Sangamon County these are the most homes available in five years on this date.
In spite of interest rates falling to 5.99% on a 30 year mortgage at the beginning of the year and slowly climbing back above 7%, there have been no bursts of activity. The 2461 closed sales in the MLS are down 803 sales or 25% from five years ago, and in Sangamon County closed sales are down 631 sales or by 27.5% from five years ago today.
As interest rates began to rise rapidly in 2022 to fight 41 year high inflation sales began to fall. In 2021 the peak of the Covid low interest rate market Sangamon County set a record with 3,264 closed home sales. By the end of 2022 sales had declined to 2,805, and by the end of 2023 closed sales had fallen to 2,373.
The impact of the rising mortgage rates as we head into the fall market remain to be seen, however they certainly will provide a drag on a market mired in a four year rut of anemic home sale activity. The saving grace will be a rising inventory of homes for sale to provide choices for the remaining demand in the market.
There are still buyers who either couldn’t find a home in the area or with the amenities they wanted, or they found them and got outbid by competing buyers. In my opinion that number of buyers are dwindling.
My reasoning is based upon the number of home listings being sold at or above asking price. Through the first three weeks of September in 2025 the number closed at or above asking price averaged 57%, the first three weeks of September this year selling at or above asking price averaged 47%. Still higher than normal but noticeably down.
Rising inventory and fewer listings selling at or above asking price indicate a weaker demand in an already historically weak market.
From NAR Thursday: “Contract Signings Barely Budge as Mortgage Rates Take Center Stage” in part:
Higher mortgage rates aren’t stopping home buyers altogether, but they aren’t exactly causing them to rush in either. Contract signings in August held fairly steady, nudging up 0.3% from July. Still, pending home sales remain 4.7% below a year ago, according to the National Association of REALTORS®’ newly released Pending Home Sales Index.
Still, “buyers steadily entered into contracts in August even though mortgage rates increased,” says Lawrence Yun, NAR’s chief economist. “However, the housing market is still sluggish with contract signings below last year. This is due to higher mortgage rates offsetting the increased buying power created by job gains and income growth outpacing home price growth.”
Nationally, pending home sales in August continue to run about 30% below their pre-pandemic 2019 levels, Yun adds.
But differences are showing up geographically, with activity varying widely from one market to another. NAR’s Pending Home Sales Index showed monthly gains in August in the South and West, up 2.3% and 3%, respectively, but fell 4.2% in the Northeast and 1.6% in the Midwest.
“The Northeast and the Midwest saw the fastest home-price growth in August, which is part of the reason that those same two regions posted the steepest declines in contract signings,” Yun says. [Close Quote]
That indicates to me to spark more home sale activity something has to give, either prices or interest rates. Right now neither are giving up locally, rates were up and August prices were up in Sangamon County.
From CNBC Wednesday on the September rates increase impact on pending sales, in part: “Mortgage demand from homebuyers drops 19% from a year ago, as interest rates surge abruptly higher”
Fast-rising interest rates are taking their toll on mortgage demand, as both potential homebuyers and current homeowners head to the sidelines. Total mortgage application volume dropped 4.1% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Last week’s results include a separate adjustment for the Labor Day holiday.
“Ongoing market concerns over spiking energy prices, persistently high inflation, and future monetary policy pushed bond yields and mortgage rates higher last week,” said Joel Kan, vice president and deputy chief economist at the MBA.
Applications for a mortgage to purchase a home dropped 1% for the week and were 19% lower than the same week one year ago. Potential buyers are still contending with high home prices. While the supply of homes for sale has been gaining in much of the country, much of that supply is on the higher end of the market. [Close Quote]
That’s the macro national view. Mortgage applications down with higher rates and prices, while supply increases but primarily on the higher end compared to our MLS with 96 homes listed under $100,000, and 217 listed over $200,000. We seem to be on the same track as the nation.
As we hit the fall equinox on Tuesday what will the upcoming seasonal changes bring to the market? Stick right here to be the first to know. As regular followers of my program know Labor Day is the bell lap, it will be a race right up to Thanksgiving when the market is the slowest of the year through January.
Make this a Great week from Fritz and Kristie Pfister at Re/Max Professionals of Springfield. If you want to buy or sell a home or both, give us a call at 217-652-7653, or email [email protected]. It would be an honor to serve you.
The opinions expressed here are solely those of Fritz Pfister or identified sources and not necessarily those of RE/MAX Professionals of Springfield, RE/MAX International, or The Capital Area Realtors. Data shared here comes from The Capital Area Realtors MLS as reported by member brokers.
