Despite optimism from people listing their homes for sale, pending sales and new listings followed expected seasonal slowdowns. Mortgage rates are starting to creep up, which could let some steam out of the market.

Asking prices of homes listed for sale increased to an all-time high during the four-week period ending September 26. Pending sales were up just 4%, the smallest year-over-year increase since June of 2020. Other housing market measures continued to show a typical seasonal cooling, with fewer than half of homes selling above list price and new listings of homes for sale down 20% from their 2021 peak.

“Home sellers continue to show their optimism with increasing asking prices,” said Redfin Chief Economist Daryl Fairweather. “However, there are already signals from the Fed and markets that mortgage rates are starting to creep up. The hit to affordability that comes with higher rates and higher home prices could let some steam out of the market. It’s never a good idea to overprice your home, but I would be especially wary of overpricing as seasonal cooling trends persist and rising rates take some affordability out of the homebuying equation.”