Buyers get biggest discount in 4 years

A topsy-turvy market

If this market feels difficult to navigate, you’re not imagining it. Right now, housing is full of contradictions.

Mortgage rates have climbed for six straight weeks, reaching their highest level since November 2023. And there’s even talk of rates potentially hitting 9% in a worst-case scenario, according to Cotality chief economist Selma Hepp.

But at the same time, buyers can find some of the best deals we’ve seen in years. Sellers are cutting prices at a historic pace, new homes are actually cheaper than existing homes in many markets, and homeowners are sitting on trillions of dollars in tappable equity they aren’t using.

So, how do we agents navigate a market that keeps pulling in different directions?

You focus on what you can control. That means sticking with the daily habits and activities that keep your pipeline full regardless of what’s going on around you.

But which habits actually matter?

That’s exactly what I get into in today’s jam-packed Blueprint.

Let’s dive in.

- David

Sellers slash prices at historic pace

20.8% of listings nationwide had a price cut in September. According to Realtor.com, that’s the highest share for any month since October 2022 and the first time this year that price cuts have exceeded 2025 levels.

Here are the other key takeaways from the report:

• Higher rates are pushing buyers out. Mortgage rates climbed from 6.66% to 7.03% in September, cutting about $11,500 from what a typical buyer can afford. Homes going under contract fell 4.1% from last year, the biggest drop since March 2025.

• More homes are for sale. Listings rose 5.4% to more than 1.16 million, the closest to pre-pandemic levels yet. Minneapolis, Seattle, and Buffalo each saw increases of 28% or more.

• The West leads in price cuts. About 22.8% of Western listings were reduced, the biggest increase of any region. Salt Lake City topped all major metros, with cuts on one in three listings.

• Asking prices are falling. The typical asking price dropped 1.4% to $419,250, marking 11 straight months of year-over-year declines.

• Most sellers are cutting prices, not delisting. The share of homes pulled from the market held steady at 5.6%. In Salt Lake City and Denver, though, sellers who don't need to sell are delisting and plan to try again in spring.

My take

Here's the uncomfortable math for sellers: on a typical $419,250 home, a 1.4% price drop saves buyers about $5,900, roughly half the $11,500 in buying power that rising mortgage rates erased almost overnight. Sellers are cutting, but they're chasing a moving target. What's interesting is that most sellers aren't giving up. Delistings are flat, and price cuts are climbing; those still on the market are increasingly willing to meet buyers where they are. The real test comes next spring. If rates are still around 7% or higher, sellers who pulled their homes to wait for better conditions could return to even more inventory and even less pricing power.

Homeowners are sitting on record equity – but not using it

U.S. homeowners with a mortgage now have $17.9 trillion in home equity, according to a new report from Cotality. Of that total, $11.5 trillion is considered "tappable,” meaning owners could borrow against it while still keeping enough equity to satisfy lenders. Yet homeowners are leaving almost all of it untouched.

Here’s why, according to CNBC:

• The richest owners are the least likely to tap. "The borrowers with the most housing wealth are often the least likely to tap it," said Cotality principal economist Thom Malone, noting that they often have little reason to move.

• Low rates have locked owners in. Anyone who bought or refinanced before or during the early pandemic likely has a mortgage rate a third or less of today's. A second loan would come at a much higher rate, which most won't take on unless they have to.

• Strong cash flow means less need to borrow. Those low monthly payments leave many homeowners with enough room in their budgets to pay for renovations or college tuition without touching their equity.

• Economic jitters are adding caution. Consumers are growing more nervous about the economy and rising interest rates, making them less willing to take on new debt.

• Untouched equity keeps growing. With home prices still rising modestly in most areas, average equity per mortgaged homeowner climbed $6,000 in a single quarter to $310,000, giving owners little incentive to cash out.

My take

What stands out isn't how much equity homeowners have, but how little they need it. Owners who locked in rock-bottom mortgage rates have low monthly payments and a pile of wealth that keeps growing on its own, so there's little reason to borrow against it or sell. That's good news for household balance sheets, but it also deepens the lock-in effect. Until rates come down or life forces a move, most of that $11.5 trillion will stay right where it is: on paper.

Markets where new homes are cheaper than existing ones

Newly built homes now sell for a median of $205 per square foot nationally, below the $212 median for existing homes, according to Zillow.

That’s a big change from recent years. From 2018 to 2024, new homes sold for more per square foot than existing homes in 77 of 84 months. The price per square foot premium for new homes peaked at $25 in November 2022. Now, new homes have sold at a discount in 17 of the past 19 months.

The discounts are deepest in markets where builders have been the most active and the supply of new homes is very high – as in Austin. 

Here are the top 5 metros where new homes are cheaper per square foot than existing homes:

1. Austin, TX: 19.3% cheaper

2. Raleigh, NC: 14.4% cheaper

3. San Diego, CA: 14.4% cheaper

4. Tampa, FL: 12.4% cheaper

5. Sacramento, CA: 11.57% cheaper

My take

It upends common sense, but new homes are cheaper than existing ones in many markets right now, at least on a per-square-foot basis. Normally, you'd pay a premium for fresh paint and a never-used kitchen, but builders who overbuilt are now stuck with more unsold homes than they've had in years. So they're doing what any seller with too much inventory does: cutting prices and sweetening deals with perks like mortgage rate buydowns. The result is a rare moment when the newer house can actually be the bargain, especially in places like Austin, where new homes cost about 19% less per square foot. Just don't wait too long, because builders have already pulled back on permits.

Schematics

The news that just missed the cut

• Here are six scripts to use, with 3 months left in 2026

• Do this if you want to generate 24 referrals in the next 12 months

• What you can do to help buyers and sellers navigate a 7.6% interest rate

• Mortgage rates could reach 9%

• This state used to be the hottest market, but is now the hardest place to sell a home

Foundation Plans

Advice from David to win the day

What are the habits that help top producers dominate their markets? In today’s installment of our Prep for 2027 series, I break down what separates agents who consistently hit their goals from those who fall short. Take these to heart, because it is your habits – what you consistently do, day in and day out — that fill your pipeline and determine your success. 

1. Top producers take action – The best agents don’t wait for business to show up. Referrals are great, but hoping your phone rings isn’t a plan. The pros know how to balance both — chasing deals now and planting seeds for the future. If you’re always waiting, you’re playing defense. Get back on offense and make things happen.

2. Top producers practice… a lot – Pick any sport or endeavor; none of the top players are riding high on just their talent alone. They are putting in the work. Make sure you have the mentality of a pro. The top agents don’t just rely on being likable or smooth. They role-play, rehearse their listing presentations, and refine their scripts until they sound effortless. Practice is what gives them confidence when it’s go-time.

3. Top producers protect their schedule – There’s a big difference between having a plan and sticking to it. Too many agents fill up their calendar only to toss it aside when something more fun comes along. The best in the game treat their time like money — if it’s on the calendar, it’s happening. No excuses, no rescheduling.

4. Top producers live in their CRM – A CRM isn’t just a fancy contact list. For top agents, it’s mission control. It tells them who to call, who to follow up with, and when to do it. Rather than overthinking about which CRM to use, what matters is that you actually use it. Make it your daily habit, and it’ll keep your pipeline full.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a wonderful week.

We’ll see you back here on Friday!

- David