U.S. President Donald Trump speaks to reporters as he departs for travel to Texas to tour areas affected by deadly flash flooding, from the South Lawn of the White House in Washington, D.C., U.S., July 11, 2025.
It’s here, reports Bloomberg. “The return of 7 percent mortgage rates in the Trump era has hit the US housing market like a thunderbolt, sending pending sales tumbling to near 12-year lows.
“The mood in the real estate industry has significantly shifted,” said Daryl Fairweather, Redfin Corp.’s chief economist. “When interest rates go up like this, fewer people can afford to buy homes, which means sales have to fall.”
President Donald Trump and MAGA elements can’t get enough of complaining about high interest rates under former president Joe Biden. However, Bloomberg reports pending home sales plunged 4 percent in September from a month earlier. This is “the biggest decline in more than three years, to the lowest level since 2014 outside the early months of the 2020 Covid pandemic, according to seasonally adjusted data from brokerage Redfin.”
With homebuying dropping to the lowest level since pandemic freeze, the supply of homes for sale climbed to its highest level since March 2020, frustrating sellers who are eager to move.
The September surge in borrowing costs drove homebuying demand down to levels seen in the aftermath of the 2007-to-2012 foreclosure crisis, reports Bloomberg. In the weeks leading up to the war against Iran, the Trump Administration was celebrating as interest rates on new home loans had dropped to their lowest levels in nearly four years. At the time it seemed the stagnant U.S. housing market was finally on the mend. Now Bloomberg reports the new economy is exposing the market’s fragility following years of soaring prices.
Pending sales fell in all 50 major US metropolitan areas tracked by Redfin for the first time since September 2023, when mortgage rates were similarly high.
“Nearly one in five sellers cut their asking prices last month and buyers grew increasingly concerned about rising mortgage rates, with 14.5 percent of purchase agreements falling through, Redfin reported, the highest percentage in the firm’s records.
The situation does nothing for first-time buyers in the Trump economy, reports Bloomberg. A so-called seller’s market means nothing if rising mortgage rates price potential buyers out of the market. And this could be contributing to a near-record share of homebuying deals falling through, reports Redfin, as more homebuyers back out of deals “than ever before.”
Nearly 19 percent of home buying deals in San Antonio, Texas, fell through in September, according to Redfin research. And nearly 20 percent of buying deals collapsed in Jacksonville, Florida.
“Nationwide, 14.5 percent of homebuying deals that went under contract in September were canceled – the highest share since the start of the pandemic,” reports Redfin. “Other than March and April 2020, it’s the highest share on record.”
The new Trump housing economy hit particularly hard in Seattle, with that city suffering the biggest decline in pending sales among major metros. Those plunged 24.4 percent from a year earlier as high borrowing costs compounded a slowdown in the city’s tech-heavy job market. Los Angeles, San Diego and Anaheim, California, all posted similar declines in pending home sales of more than 15 percent, according to Redfin.
Home prices were already creeping out of reach for many who would like to buy last year, with the tariff drama under Trump making it both more expensive to build new homes and making the future more unpredictable for would-be homebuyers,” reported NPR.
