Robert Reffkin said 42% of the homes on the market in September have taken a price cut, the highest share in nearly ten years.
The morning's data said existing home sales fell 2% from July and hit the slowest pace in 14 months, which reads as one weakening market. Reffkin's own transaction data splits it in two, with the bottom of the market falling and the top still rising.
"And what we're seeing is the low end is dragging down the overall market, where homes that are between 100,000 to 250,000 are down 10%, while homes that are $1 million plus are actually up 4%."
Reffkin runs Compass, which Squawk on the Street introduced as the largest residential brokerage in the United States, so he sees price cuts, rents and closings by price point and by city before they reach the national statistics.
I listened to the full segment so you can skip it.
Here are the 4 calls that matter.
👤 Guest: Robert Reffkin, Chief Executive of Compass, the largest residential brokerage in the US
🎙️ Host: Carl Quintanilla, a co-anchor of Squawk on the Street on CNBC
📰 Published: 10 September 2026 on CNBC's Squawk on the Street
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 6 min
Key Takeaways
There is no single housing market: the $100,000-$250,000 band is down 10% while $1M-plus homes are up 4%
The low end moves with mortgage rates, the high end with the stock market, and buyers at the top are paying cash
42% of September listings have cut their price, the highest share in nearly ten years
Transaction volume is close to flat year over year even with mortgage rates 50 basis points higher than a year ago
Down 2% month over month, down 1% year over year, with prices up 1.6%
San Francisco rents are up 26% while the country is flat and New York is up 6%
Two pending San Francisco IPOs are lifting luxury markets as far away as Miami and the Hamptons
Homes have arguably become more affordable over four years, because incomes grew 3-4% a year while prices stayed flat
His next geographic call is Texas rather than a coastal city
1. Two Housing Markets
Reffkin's first answer to what the existing-home data shows was that the question is wrong. He said there is not one market but different markets by geography and by price point, and that the weakness is concentrated at the bottom: "And what we're seeing is the low end is dragging down the overall market, where homes that are between 100,000 to 250,000 are down 10%, while homes that are $1 million plus are actually up 4%."
The two ends respond to different prices entirely. "And that's because while the low end is more mortgage rate sensitive, the high end is more wealth effect sensitive, and we have mortgage rates at all time high, but we also have the stock market at all time high."
Asked why higher mortgage rates do not bite at the top, he pointed at the method of payment. "Because they're not using mortgages. They're using all cash." With equities at a record, he said, those buyers have the purchasing power.
The upper end is also the larger part of the market by volume, Reffkin said, so the lower end cannot offset it on a transaction basis.
2. Price Cuts at a 10-Yr High
The negotiating position has moved to the buyer. "So 42% of the homes on the market in September have had a price drop. That's the highest in nearly ten years." He said that makes it a good time to be a buyer, because it shows sellers are motivated to negotiate.
Volume is holding up better than the headline suggests. "When you look at transactions for the overall market, yes, they're down 2% year over year. I'm sorry 2% month over month. But year over year they're down 1%. And when you actually include price, price is up 1.6%." He called the result modestly up year over year in dollar terms, "which is impressive given that mortgage rates are 50 basis points higher now than they were a year ago."
Where the price cuts are concentrated is a supply story, not a demand story. Asked by Carl Quintanilla about the indices of motivated sellers clustering in states like Colorado and, some argue, Texas, Reffkin said Austin saw people move back after the earlier run-up from California. "We're seeing the least price cuts are actually in Chicago and in New York, and that's because there's very little supply." He said the Northeast and New England are short of supply as well.
3. San Francisco Rents +26%
The one market he cannot explain with the national framework is San Francisco. "San Francisco continues to be beyond belief." He said he had made the same point on the show in the spring and in early summer and it has not stopped.
Rents are the cleanest measure of it. "Rent prices are basically flat in the country. In New York they're up 6%. But in San Francisco they're up 26%."
At the top of that market, bidding has changed the job of the broker. "And the kinds of people that compete in the higher end are not used to losing deals." Reffkin said that puts pressure on Compass's agents to secure properties for them.
Two pending San Francisco IPOs are moving prices in other cities. Reffkin named Anthropic among the companies with an IPO pending in San Francisco and said the effect is not local: "They're helping all of the key luxury markets. They're helping in Miami, obviously Hamptons, of course in New York in the high end and penthouses. And so we're seeing a benefit from this wealth effect everywhere."
New York itself is doing well on the same mechanism, he said, with low inventory against the demand and prices up in sales as well as rentals.
Quintanilla, recalling the period when people asked whether anyone would live in San Francisco again, noted that the city is the poster child for the wealth effect Reffkin describes. Reffkin agreed and reminded him of his own earlier call on air that the two places to buy were downtown Manhattan and downtown San Francisco.
4. His Next Call: Texas
Asked what today's equivalent of that San Francisco call would be, Reffkin picked a state rather than a city. "So the call I'd make right now would be on a geography basis, would be Texas." His reason was population: he expects it to keep increasing.
He was explicit that it is not as good a call as the last one. Reffkin said San Francisco was obvious because the fear was so extreme, and reached for the contrarian rule to explain the difference: "when people are fearful, be greedy, when people are greedy, be fearful."
Bonus Insights
Reffkin made the case that housing has become more affordable over four years, not less. "So over the last four years, there's an argument that homes are more affordable. And here's why, because prices have been basically flat across all price points." Including the low end, he said, purchasing power from income has risen an average of 3% to 4% a year, which outpaces flat prices. "The only offset to that is the mortgage rate." Quintanilla had asked what, beyond lower mortgage rates, could improve affordability given the housing legislation already passed.
Supply is rebuilding toward pre-pandemic levels, and his rate forecast is the trigger. "We have 4% more supply than we did this time last year." Reffkin said Compass forecasts the mortgage rate reaching 7% by the end of this year, and that at that point: "And if we get there, we will basically be at pre-pandemic levels of inventory."
Reffkin's bottom line is that the national housing numbers are averaging two markets moving in opposite directions — a mortgage-rate-driven bottom that is falling and a stock-market-driven top that is still rising — and that with 42% of listings already cut, the leverage in the transaction has moved to the buyer.
Products, Companies & Tools Mentioned
Compass (Reffkin's brokerage, and the source of the price-cut, transaction, rent and supply figures he cited)
Anthropic (Named as one of the pending San Francisco IPOs whose wealth effect he says is lifting luxury markets from Miami to the Hamptons)
If this was worth your time, send it to someone closer to the industry than you are.
Get the latest market chatter as it happens: