U.S. Home Sales Hit a 10-Year Low for August and September. Las Vegas Sales Fell Even Faster

by Ryan Rose

What Happened

Cotality, a property data company, released its monthly report "10 things to know about the property market: October 2026" on Oct. 29. It said U.S. closed home sales fell 5.4% year over year in September. Combined sales for August and September were the lowest for those two months in 10 years. Sales dropped in 40 of the 50 largest metro areas. Denver fell the most at 17.0%, followed by Washington, D.C., at 12.1% and Atlanta at 11.0%.

The report then explained why. It looked at housing turnover, which is the share of all homes that sell in a year. Right now, that rate is 3.8%. From 2011 to 2019, it averaged 5.0%. That may sound like a small difference. It is not. Cotality said that if turnover were back at 5%, about 1.6 million more homes would sell each year in the U.S.

The biggest reason turnover is low is the rate gap. Cotality said 30-year mortgage rates averaged 7.35% in October. The weighted average rate on all outstanding mortgages was 4.33% in August. That outstanding average hit a low of 3.34% in 2022, after millions of owners bought or refinanced when rates were at record lows. Cotality summed it up this way: "Low legacy rates keep existing homeowners equity-rich and disincentivized to sell."

Cotality also found that home prices were still up 1.8% year over year nationally. So the slowdown is in how many homes sell, not in a broad drop in prices. Owners are not being forced to sell. Most are simply choosing to stay.

The report covered a few other trends that tie into this. Cotality looked at adjustable-rate mortgages, or ARMs, which start with a fixed rate for 5, 7 or 10 years and then adjust. It found that serious delinquency on ARMs made after 2010 was below 0.5% in mid-2026, about half the rate for fixed-rate loans. That is very different from the risky ARMs many people remember from before 2008.

Wooden family figures next to a model house and keys, showing how homeowners weigh moving against keeping a low mortgage rate

Why It Matters to Las Vegas Residents

Let's put the rate gap in real dollars. On a $300,000 loan, a 30-year mortgage at 4.33% has a principal and interest payment of about $1,490 a month. At 7.35%, the same loan costs about $2,067 a month. That is about $577 more every month. On a $400,000 loan, the payment goes from about $1,987 to about $2,756, roughly $769 more a month. Those figures do not include taxes or insurance.

Now picture a Las Vegas family with a low-rate mortgage who wants a bigger home, or a home closer to work or school. Even if they sell for a good price, their new payment could jump by hundreds of dollars a month for a similar loan amount. Many decide it is not worth it. They stay, renovate, or wait. Every family that waits is one less home for sale and one less buyer in the market.

That is the lock-in effect in action. It explains how sales can fall even while prices hold up. Fewer owners list, so there are fewer homes to buy. Fewer of those owners are also out shopping for their next home, so there are fewer buyers too. The whole market moves slower.

In Las Vegas, though, something interesting is happening. Inventory has been growing, not shrinking. Las Vegas Realtors reported 7,995 single-family homes listed without offers in September, up 6.6% from a year earlier. That works out to about five months of supply, up from about four a year ago, according to FOX5. So even with lock-in, more homes are sitting on the market here. That points to buyers pulling back because of payments, while some owners still need to sell for life reasons like a new job, a growing family, a divorce or retirement.

For buyers, that combination is useful. More homes on the market and fewer buyers competing usually means more room to negotiate on price, repairs and closing costs. Homes that are priced right still sell. Las Vegas Realtors said 75.9% of homes that sold in September went under contract within 60 days, up from 72.0% a year earlier. But buyers have more choices than they did when rates were low and bidding wars were common.

Cash buyers are a special case. They do not need a mortgage, so the rate gap does not touch them directly. Las Vegas Realtors said 23.5% of September sales were paid in cash, up slightly from 23.0% a year earlier. That includes investors and many people moving here who sold a home somewhere else. Cash buyers help keep the local market moving even when financed buyers hold back.

Think about what 1.6 million missing sales a year really means. Each sale usually involves a moving truck, a lender, an inspector, a title company, repairs, new furniture and more. When fewer homes change hands, a lot of local businesses feel it. It also means fewer homes come up for sale in the neighborhoods people want, so buyers who need a specific school or commute have fewer chances to find the right fit.

Background and History

The lock-in effect is a fairly new problem. For most of the past 40 years, mortgage rates trended down. Owners who moved usually got the same or a better rate. There was little reason to stay put just to protect a rate.

That changed after 2020. Rates fell to record lows during the pandemic. Millions of people bought homes or refinanced at rates in the 2s and 3s. That is why the average rate on all outstanding mortgages bottomed at 3.34% in 2022. Then rates rose fast. Within a short time, new mortgages cost far more than what most owners already had. The gap between the two numbers opened wide and has stayed wide.

A metal key in a door lock, a simple picture of the mortgage lock-in effect keeping owners in their homes

Owners who stay are also sitting on a lot of equity. Cotality estimated that the average buyer from 2020 now has about $256,000 in equity, compared with about $170,000 for a 2022 buyer. Instead of selling, many owners are borrowing against that equity. Cotality said home equity lending is at its highest level since 2008. In the first three quarters of 2026, lenders authorized 1.1 million home equity lines of credit worth $215 billion. That is another sign that people are improving the homes they have instead of moving.

Home equity loans, a separate product from lines of credit, went the other way. Cotality said lenders made 361,000 home equity loans worth $28 billion in the first three quarters of 2026. The number of those loans fell 36%. Owners seem to prefer the flexibility of a line of credit, which lets them borrow only what they need for a project.

Las Vegas went through its own version of this. During the low-rate years, the valley saw huge demand, fast sales and rising prices. Many local owners locked in low rates then. Now, with higher rates, sales have slowed and listings have built up. The single-family median was $470,000 in September, flat from a year earlier and below the $490,000 record set this spring.

What Happens Next

The lock-in effect will ease slowly, not all at once. Two things can shrink the gap. Market rates can come down, or the average rate on existing mortgages can rise as more people buy at today's rates and older low-rate loans get paid off. Both take time. Even a modest drop in market rates could free up some owners who have been waiting to move.

Life also keeps moving. People change jobs, have kids, retire and relocate no matter what rates do. Those moves will keep a baseline of homes coming onto the market. In Las Vegas, steady in-migration from other states also brings in buyers who do not have a local low-rate mortgage to protect.

Watch three numbers in the months ahead: the average 30-year rate, the local months of supply, and the monthly sales count from Las Vegas Realtors. If rates fall and supply starts shrinking, that is a sign the lock-in effect is loosening and the market is picking up.

Ryan's Take

I talk to owners every week who want to move but feel stuck. They love their 3% rate, and I get it. That rate is worth a lot of money every month. But I also tell them to look at the full picture. How much equity do you have? Would a smaller loan on the next home keep the payment reasonable? Would the move improve your life enough to be worth a higher rate? Sometimes the answer is to stay. Sometimes it is to sell, use the equity, and buy something that fits your life better. The point is to run the actual numbers, not to assume you are trapped.

For buyers, I see the lock-in effect as part of an opening. Many of your competitors are sitting on the sidelines. Inventory in the valley is up. That gives you more time to look and more room to negotiate. If you can handle today's payment, you may get a better deal on price and terms than buyers did a few years ago. And if rates drop later, you may be able to refinance.

I also want to be honest about the limits. Refinancing later is not a promise. Rates could stay where they are for a long time. So I tell buyers to buy a home with a payment they can live with today, at today's rate. If rates fall, a refinance is a bonus. If they do not, you are still comfortable. That approach keeps people out of trouble no matter what the market does.

For sellers who do decide to move, the slower pace means preparation matters more. With about five months of supply in the valley, buyers can compare your home to many others. Clean, well-priced homes with recent repairs done tend to get the offers. Homes that need work or are priced high tend to wait. If you are giving up a low rate to move, you want the sale to go smoothly, so it pays to get the details right before you list.

The Las Vegas Valley lit up at night, a market where more homes are for sale even as many owners hold onto low mortgage rates

A white house framed by trees, the kind of home many owners keep instead of selling because of their low mortgage rate

What You Can Do

If you are an owner thinking about a move, start with your equity. Ask for a current value estimate based on recent sales near you. Subtract what you owe. Then talk to a lender about what your payment would be on your next home at today's rates, using that equity as your down payment. You might find the payment is closer to your current one than you think, especially if you are downsizing or putting a large amount down.

Ask about options that can soften the rate gap. Some buyers use seller-paid credits to buy down their rate. Some loans, such as certain FHA and VA loans, may be assumable, which means a buyer can take over the seller's existing rate if the lender approves. Not every loan qualifies, and the rules are specific, so ask a lender before you count on it.

If you are a buyer, use the slower market to your advantage. Get pre-approved so you know your budget. Look at homes that have been on the market for a few weeks, since those sellers may be more flexible. Ask for help with closing costs or a rate buydown as part of your offer. Make sure your inspection is thorough, because in a market with more supply, you have more room to ask for repairs.

If you are just watching for now, keep an eye on rates and local supply. When the gap between new and existing mortgage rates starts to narrow, more homes and more buyers will come back. Being ready ahead of time puts you in a better spot.

Have questions about how this affects your home or neighborhood? Reach out to Ryan Rose or text/call 702-747-5921 anytime. Ryan Rose | Real Broker, LLC | ryan@rosehomeslv.com | rosehomeslv.com