Pending home sales have fallen to their lowest level since tracking began in 2001. What does this mean for buyers, sellers, and investors?
The U.S. housing market is sending a clear message: buyers are becoming more selective, homes are taking longer to sell, and sellers are discovering that yesterday’s pricing strategies may no longer work.
And while that might sound like bad news for the housing market, it could create some interesting opportunities for homebuyers and real estate investors who know what to look for.
The key is understanding that a changing housing market doesn’t necessarily mean you should sit on the sidelines. It means you may need to approach buying real estate differently.
A Housing Market That Has Slowed Dramatically
According to the National Association of Realtors, the Pending Home Sales Index fell to 66 in September 2026, the lowest reading since the data series began in 2001.
To put that into perspective, the index is approximately 50% below its pandemic-era peak and roughly 35% below pre-pandemic levels. Pending home sales are also down approximately 11% compared with September 2025.
Perhaps most remarkably, the index has fallen below the lows experienced during the 2008–2009 housing crisis.
Pending home sales measure properties that have gone under contract but haven’t yet closed, making the index an important leading indicator of housing market activity.
The reasons behind the slowdown aren’t particularly surprising.
Home prices remain elevated in many markets, mortgage rates have reduced purchasing power, and affordability continues to be a major obstacle for prospective buyers.
At the same time, many existing homeowners are reluctant to sell because they have mortgage rates considerably lower than what’s available today.
The result? A housing market that isn’t functioning the way it did just a few years ago.
But here’s something important to understand: A slowdown in home sales doesn’t automatically mean home values are collapsing.
It means fewer buyers and sellers are coming together on price and terms.
And that distinction creates opportunities.
Here is the raw data:
The Problem Many Home Sellers Are Facing
Imagine a homeowner who listed a property four months ago.
Initially, the seller was confident about the asking price. Perhaps the neighboring house sold for a similar amount last year, or the seller received an optimistic recommendation about what the property might bring.
But the home didn’t sell.
After 30 days, the seller reduced the price.
Another month passed. Another price reduction.
Now the property has been on the market for 120 days, and competing homes are still sitting unsold.
The seller is frustrated. Carrying costs are adding up, and the plans that originally motivated the sale have been delayed.
Eventually, the seller starts considering another option: renting the property rather than selling it.
This is where things get interesting.
Because that homeowner may no longer be primarily concerned about achieving the highest possible sales price.
The seller may be more concerned about solving a problem.
And buyers who recognize that distinction may have a negotiating advantage.
The Best Real Estate Deal Isn’t Always the Lowest Price
Most buyers approach negotiations with one primary objective: Get the seller to reduce the price.
And certainly, price reductions can make a property more attractive.
But sometimes the best opportunity isn’t convincing the seller to accept another $10,000 or $20,000 reduction.
It’s finding a way to structure a transaction that accomplishes what both parties need.
For example, a motivated seller might be willing to consider:
- Seller concessions toward closing costs. Instead of reducing the purchase price, the seller contributes toward the buyer’s allowable closing costs, helping preserve the buyer’s cash.
- A mortgage rate buydown. Seller-paid concessions may help the buyer obtain a lower mortgage rate, improving monthly affordability.
- Flexible closing or occupancy terms. A seller who needs additional time to relocate may value flexibility as much as a higher purchase price.
- Seller financing. In certain circumstances, a seller may be willing to finance part of the transaction, potentially creating terms that benefit both parties.
- Assumption of an existing mortgage. Some government-backed mortgages may be assumable, subject to the loan’s requirements and servicer approval. An existing low-interest-rate mortgage could represent a significant advantage.
Each of these strategies comes with its own financing, legal, and underwriting considerations. Not every approach will work for every property or borrower.
But the larger point is that the terms of a real estate transaction can sometimes be just as important as the price.
Why Real Estate Investors Should Be Paying Attention
For investors, a slower housing market can create opportunities that simply weren’t available when properties were receiving multiple offers within days of being listed.
Consider a seller who purchased an investment property several years ago.
The property has appreciated, but the owner no longer wants the responsibility of managing tenants, paying for maintenance, or covering ongoing expenses.
After several unsuccessful attempts to sell, that owner might become more receptive to creative offers.
An investor who understands the seller’s financial circumstances and motivation may be able to propose a transaction that works for both parties.
For example, seller financing might provide the owner with ongoing income while allowing the investor to acquire the property with a different financing structure.
Or a seller concession could help the investor preserve cash that might otherwise be needed for closing costs.
Of course, investors still need to carefully evaluate rental income, expenses, vacancies, maintenance, financing costs, and potential appreciation.
A motivated seller doesn’t automatically make a property a good investment.
But a motivated seller combined with the right property, purchase price, and financing structure can create a compelling opportunity.
What About Buyers Looking for a Primary Residence?
These opportunities aren’t limited to investors.
If you’re purchasing a home to live in, a slower market may give you something buyers haven’t enjoyed consistently in recent years: negotiating leverage.
You may have more time to evaluate properties, request repairs, negotiate seller concessions, or structure a financing strategy that better fits your long-term goals.
And remember, the lowest purchase price doesn’t necessarily produce the lowest overall cost of homeownership.
Sometimes a seller-paid permanent mortgage rate buydown can provide greater long-term savings than an equivalent reduction in the purchase price.
Other times, a price reduction is clearly the better option.
The right answer depends on your financing, how long you expect to own the property, and your overall financial objectives.
That’s why I encourage my clients to evaluate the entire transaction rather than focusing exclusively on the asking price or today’s mortgage rate.
The Importance of Having a Mortgage Strategy Before You Negotiate
One mistake I see buyers make is waiting until they’ve negotiated a purchase agreement before thinking seriously about financing.
In a changing market, that’s backward.
Understanding your financing options before making an offer can help you negotiate more effectively.
For example, knowing how much a seller concession could reduce your monthly payment might change the offer you make.
Understanding the differences between a conventional investment property mortgage, a second-home loan, and financing for an owner-occupied property can also help you identify opportunities.
And if you’re considering an unconventional purchase structure, it’s especially important to understand the financing and underwriting requirements before committing to the transaction.
A creative offer only works if the transaction can actually close.
A Changing Market Rewards Buyers Who Think Differently
Real estate markets are constantly changing.
A few years ago, buyers often had to move quickly, waive contingencies, and compete against multiple offers.
Today, in many markets, the balance of negotiating power has shifted.
Some sellers are still pricing their homes as though it’s 2021 or 2022. Others have recognized that the market has changed and are becoming more flexible.
The opportunity for buyers and investors is to identify those sellers and understand what they’re trying to accomplish.
Sometimes the solution is a lower price.
Sometimes it’s better financing terms.
And sometimes it’s simply creating a transaction that solves a problem the seller hasn’t been able to solve.
The question isn’t just whether now is a good time to buy real estate. It’s whether you’re prepared to negotiate differently when the market changes.
Let’s Build a Smart Mortgage Strategy
As The Lending Coach, my job is about much more than finding you a mortgage rate.
I want to understand your goals, evaluate your options, and help you make financing decisions that support your long-term financial success.
Whether you’re purchasing your first home, moving into another property, or looking to expand your real estate investment portfolio, I can help you evaluate the numbers and identify the financing strategy that makes the most sense.
And sometimes, the right mortgage strategy can help turn a challenging real estate market into a valuable opportunity.
Let’s talk before you make your next offer.
Reach out to me directly—I’d be happy to go over the specifics to help you figure out the best plan of action.
As always, you can set up an appointment with me here…
