Zillow: Monthly Mortgage Payment Up 6.7% as Pending Sales Fall 8.5%

A typical U.S. buyer putting 20% down now faces a $1,922 monthly principal-and-interest payment, up 6.7% from a year earlier, while the typical home value rose just 1%. Zillow’s September report, released October 6, shows newly pending sales fell 8.5% year over year and 11.2% from August. Financing, not a renewed jump in prices, is the squeeze.

Related reading: Housing Week: More Listings, But Buyers Still Face a Payment Wall.

Pending listings are the more useful signal for the next few months than closings. Zillow’s preliminary nowcast counted 319,346 existing-home sales in September, down 2.5% from a year earlier and 5.6% from August. But closings reflect contracts signed earlier. New pending sales capture households deciding now whether a home is worth its financing cost.

That decision is meeting a sharp change in rates. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed average at 7.28% on October 1, compared with 7.03% one week earlier and 6.34% on October 3, 2025. The 15-year average was 6.60% on October 1, versus 6.42% a week earlier and 5.55% a year earlier. Freddie Mac says the survey uses mortgage rates from thousands of loan applications, with weekly figures reflecting applications over the prior Thursday through Wednesday.

Related reading: Freddie Mac's 7.28% Rate Reprices Fall Housing Demand.

Home values have barely advanced, but the payment burden has. Zillow estimates a typical U.S. home value of $366,913 in September. That was up 1% year over year and down 0.5% from August.

For a buyer putting 20% down, the monthly principal-and-interest payment was $1,922, 6.7% more than a year earlier. Taxes and insurance are excluded.

Related reading: 7.28% Mortgage Rate Puts October Home Demand to the Test.

Financing costs, not a renewed price jump, account for the pressure.

More choice, fewer contracts

Supply is improving, though the improvement is measured against a constrained market. Zillow counted 1.39 million homes for sale in September, 2.5% more than a year earlier and 1.5% fewer than in August. That was still 16.1% below its pre-pandemic norm. New listings totaled 343,311, up 0.4% from September 2025 but 11.9% below the pre-pandemic baseline.

Related reading: September Housing Data: Listings Rise, Contracts Fall.

The combination matters. A buyer can have more listings to compare than last fall and still face fewer choices than in a more normal market. Sellers are competing for a smaller pool of financed buyers. Zillow put the share of September listings with a price cut at 27.4%, compared with 26.2% a year earlier.

Homes took a median 29 days to go pending, two days longer than both August and a year earlier.

In the report, Zillow’s September sales count is explicitly preliminary and due for revision mid-month. Its pending-sale measure also differs from closed sales: it tracks listings moving from for-sale to pending status. Those distinctions matter because one noisy month should not be treated as a final account of demand. Still, both the forward measure and the completed-sale nowcast point down from a year earlier.

Rent offers a partial counterpoint

Rent is another cost of waiting. Zillow’s Observed Rent Index put the typical U.S. rent at $1,932 in September. That was 2.7% higher year over year and 0.1% above August.

Annual growth was the fastest since April 2025.

Concessions appeared on 39.6% of rental listings, up from 37.4% a year earlier.

Rent growth accelerated each month since April.

Asking rents are rising, but landlords are also using incentives to attract tenants.

For housing affordability, ownership and renting are not moving in lockstep. Zillow estimates a median-income household would spend 34.3% of its income on a typical monthly mortgage payment in September when taxes, maintenance and insurance are included, up from 33.7% a year earlier. Its equivalent rent measure was 26.3%, down from 26.4% a year earlier. The comparison favors renting on current monthly cost, but it does not capture a household’s equity accumulation, moving costs, or the property-specific difference between rent and ownership expenses.

The bull case for buyers is that growing inventory and more price reductions improve negotiating room, while a rate decline could bring sidelined households back. The bear case is visible in the pending data: a higher payment can overwhelm modest nominal price growth, and the autumn calendar is not a reliable window for a quick rebound. Zillow’s chief economist said the company expects sales to remain below year-earlier levels through the fourth quarter, while acknowledging rates could reverse some of their rise. That is a forecast, not an observed outcome.

The next test is whether contract activity stabilizes as rates and listings change through October. Freddie Mac’s next scheduled weekly mortgage-rate release is October 8, 2026, and Zillow expects its October market report on November 5, 2026. Until then, the September evidence says inventory is loosening at the margin, but demand has not caught up. That gap, rather than home-value growth alone, is the housing signal to watch.

This content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Consult a qualified financial advisor before making investment decisions.

Sources: Zillow, September Market Report, released October 6, 2026; Freddie Mac, Primary Mortgage Market Survey, October 1, 2026; Federal Reserve Bank of St. Louis, FRED series MORTGAGE30US, retrieved October 7, 2026.