10 Key Takeaways on the U.S. Housing Market This Month

High mortgage rates continue to hold back home sales, trap many owners in older loans and deepen regional price gaps, while record home equity is changing the way households borrow and build wealth. The divide between current financing costs and the much lower rates many owners locked in before 2022 is still limiting supply, even as expensive borrowing weighs on affordability and activity.

Recent analysis from property data firm Cotality shows that, despite substantial homeowner equity, transactions have not meaningfully rebounded. The terms and timing of a mortgage can also shape household wealth long after a home is purchased.

Top 10 developments shaping the U.S. market:

1. National home-price growth remains modest, with sharp regional differences.

U.S. home prices increased 1.8% year over year in August, according to Cotality's Home Price Index, up from 1.6% in July. Cleveland posted 6.4% annual growth, helped by relative affordability and tight supply. Austin saw a 2.1% drop as inventory rose and demand softened. National averages hide these local differences: limited supply can still support gains despite high rates, while higher inventory and weaker affordability can pressure other markets.

2. The Midwest and Northeast are outpacing parts of the Sun Belt.

Home prices rose 6.8% annually in Illinois and 6.3% in Connecticut, while Texas prices fell 0.7%. Tight supply continues to support values in parts of the Midwest and Northeast. In parts of Texas and other Sun Belt markets, more available homes and resistance to high monthly payments are pushing prices lower. Local supply, affordability and demand are increasingly driving performance rather than a single national pattern.

3. Home sales have dropped to a 10-year low.

Closed home sales were down 5.4% year over year in September, bringing combined August and September activity to the lowest level in a decade. Sales fell in 40 of the 50 largest metropolitan areas. Denver posted the largest cited drop at 17%, followed by Washington, D.C., at 12.1% and Atlanta at 11%. New York City stood out as an exception, with sales rising nearly 1%. Higher borrowing costs have increased monthly payments, discouraging buyers and making it harder for sellers to find purchasers at the prices they want.

4. FHA-backed financing is unlikely to reshape the build-to-rent market.

New access to lower-cost Federal Housing Administration-insured multifamily financing for eligible build-to-rent projects could help some developers. Still, Cotality expects only a limited effect on overall rental supply and rents. More units can put downward pressure on rents, while cheaper financing may encourage more development and competition. But construction costs, execution risks, processing delays and restrictive zoning remain barriers. With annual build-to-rent production below 100,000 units, the added supply is unlikely to significantly alter the broader rental market soon.

5. Housing turnover remains far below historical norms.

The U.S. housing turnover rate has fallen to 3.8%, well below the 5% average seen from 2011 through 2019. The country had about 18 million more households in 2025 than in 2013, yet annual sales remained near similar levels. Cotality estimates that a return to a 5% turnover rate could generate about 1.6 million more home sales a year. Low turnover limits options for buyers and reduces mobility for work, family needs or other life changes.

6. The mortgage-rate gap is still discouraging moves.

Thirty-year mortgage rates averaged 7.35%, compared with a weighted-average rate of 4.33% on outstanding U.S. mortgages in August. That outstanding average has climbed from a 3.34% low as higher-rate loans have entered the market. Selling a low-rate home often means taking on a much more expensive loan on the next purchase; refinancing can be similarly unattractive. This lock-in effect reduces listings and helps keep transaction volume weak, even among homeowners with substantial equity.

7. Adjustable-rate mortgages are drawing borrowers who want lower payments.

Modern ARMs often start with fixed-rate periods of five, seven or 10 years before adjusting under contract limits, and they also come with tighter underwriting standards. Cotality says serious delinquency rates on ARMs originated after 2010 were below 0.5% in mid-2026, about half the rate for fixed-rate mortgages, and stayed under 3% during the height of the 2020 pandemic. Their early payment savings come with later uncertainty, so borrowers need to understand when adjustments begin, how often they occur and the maximum payment they could face.

8. Home-equity borrowing has reached its highest dollar volume since 2008.

In the first three quarters of 2026, lenders approved about 1.1 million home-equity lines of credit totaling $215 billion and originated 361,000 closed-end home-equity loans totaling $28 billion. Combined dollar volume was the highest since 2008. HELOC dollar volume rose 5.5% year over year even as the number of loans fell 8%. Closed-end equity loan counts dropped 36%, and dollar volume slipped nearly 12%. Large amounts of equity are supporting borrowing, though demand is not equally strong across products. These loans also put the home at risk if repayments cannot be made.

9. Mortgage rates are not the only reason people are staying in place.

Cash buyers, who are not directly affected by mortgage rates when they purchase, are staying in their homes at rates similar to mortgaged owners. The gap in retention rates was 9.1 percentage points for homes bought in 2017-2019 and 8.2 percentage points for homes bought in 2022-2023. Other obstacles are also at play, including the cost of the next purchase, limited suitable inventory, relocation expenses, family considerations and uncertainty about future costs. Lower rates alone may not restore historical mobility.

10. Mortgage timing is widening wealth differences among households.

Households that bought homes in 2020 have gained about $256,000 in home equity on average, compared with roughly $170,000 for those who bought in 2022. The difference reflects purchase prices, later value changes and principal paid down. Buyers who locked in rates below 4% before borrowing costs rose also benefit from lower monthly payments than those financing similar homes now. Those payment differences can affect retirement saving and other financial goals. Home equity is not liquid wealth; results depend on each household's price, down payment, loan balance, property value and ownership costs.

The bottom line

Cotality's analysis describes a market shaped by affordability pressures, limited turnover, accumulated equity and mortgage structure. Many current owners have strong reasons to keep low-rate loans. Buyers face higher costs and uneven local conditions. Home-equity lending and ARMs provide alternatives, but each comes with trade-offs. Stable national prices do not mean the market is fluid or broadly accessible. With sales near decade lows and turnover well below historical averages, the number of households able or willing to move remains limited. A durable recovery will depend on mortgage rates, housing supply, local affordability and whether buyers and sellers have enough financial incentive to transact.