Sales hit a seven-month high, but inventory and affordability challenges persisted
Existing-home sales in the United States posted a 1.5% gain in September, reaching a seasonally adjusted annual rate of 4.06 million units, according to the latest National Association of REALTORS (NAR) Existing-Home Sales Report.
The uptick, the highest since February, was driven by falling mortgage rates and improved affordability. It was accompanied by a 14% year-over-year surge in available inventory, though supply remained below pre-pandemic levels.
“As anticipated, falling mortgage rates are lifting home sales,” NAR chief economist Lawrence Yun said. “Improving housing affordability is also contributing to the increase in sales.”
Yun added, “Inventory is matching a five-year high, though it remains below pre-COVID levels. Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.”
Regional and price trends show mixed results
The median existing-home price climbed 2.1% year-over-year to $415,200, marking the 27th consecutive month of annual price gains.
Single-family home sales climbed 1.7% to a 3.69 million annual rate, with a median price of $420,700—up 2.3% from last year.
Condo and co-op sales remained flat at 370,000 units, with the median price slipping 0.6% to $360,300.
Regionally, the West led the gains with a 5.5% month-over-month increase in sales, followed by the Northeast and South, which posted 2.1% and 1.6% rises, respectively. The Midwest saw a 2.1% decline.
Year-over-year, sales were up in the Northeast (4.3%), Midwest (2.2%), and South (6.9%), and unchanged in the West. The Northeast also recorded the highest median price at $500,300, a 4.1% annual increase.
Inventory and buyer activity remain key challenges
Inventory challenges persisted despite the increase. September’s 1.55 million units represented a 4.6-month supply at the current sales pace, up from 4.2 months a year ago. Properties typically stayed on the market for 33 days, compared to 28 days last September.
First-time buyers made up 30% of transactions, up from 26% a year earlier, but still below the 40% share many experts consider healthy for market growth.
Mortgage rates and economic uncertainty shape outlook
Mortgage rates, a key driver of recent activity, averaged 6.35% for a 30-year fixed loan in September, down from 6.59% in August and near a one-year low, according to Freddie Mac.
The Federal Reserve’s recent rate cuts have helped ease borrowing costs, though broader economic uncertainty and a stalled labor market could temper future gains.
A government shutdown also delayed some contract closings, particularly in flood-prone areas affected by the suspension of the National Flood Insurance Program.
Cash buyers accounted for 30% of sales, unchanged from a year ago, while distressed transactions—foreclosures and short sales—remained low at 2%.
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