Sales of previously owned homes ticked up in September as slightly lower mortgage rates and improving affordability coaxed more buyers back into the market. According to the National Association of Realtors® (NAR), existing-home sales rose 1.5% from August and were 4.1% higher than a year earlier, signaling that the housing market may finally be gaining a bit of momentum after a long stretch of sluggish activity.
Mortgage rates hovering on the lower end of the 6% range played a major role in the shift. The average 30-year fixed rate has been sitting just above 6%, and with Freddie Mac set to announce the latest weekly rate, many in the industry are watching closely to see whether the downtrend continues. NAR Chief Economist Lawrence Yun noted that the recent pullback in borrowing costs has already begun to energize demand and ease some of the pressure buyers have felt over the past two years, while still acknowledging that affordability challenges remain in many markets.
Price trends, however, show no sign of reversing. The median existing-home price in September was $415,200, up 2.1% from $406,700 a year earlier. This marks the 27th consecutive month of year-over-year price gains, underscoring how resilient home values have been despite higher rates and economic uncertainty. Yun pointed out that many homeowners are in strong financial positions, limiting distressed sales and forced listings. That stability, combined with steady demand and still-tight supply in many areas, continues to push prices higher and supports overall household wealth.
Inventory conditions improved modestly but remain constrained compared with the pre-pandemic era. Total housing inventory reached 1.55 million units in September, a 1.3% rise from August and a sizable 14.0% increase from the 1.36 million homes on the market in September 2024. Even so, NAR data show a 4.6-month supply of unsold inventory—unchanged from the previous month and only slightly higher than the 4.2 months recorded a year earlier. Yun described inventory as matching a five-year high but still falling short of what was typical before COVID, adding that the “lock-in” effect—homeowners reluctant to give up ultra-low mortgage rates—has weakened somewhat with time, but not enough to fully normalize supply. He estimates the market would need roughly 300,000 additional homes to truly return to pre-COVID inventory levels.
Seasonal patterns are also shaping the landscape as the market moves from fall toward winter. Historically, list prices and buyer activity soften in the late autumn and early winter months compared with the summer peak. Yun noted that while closing activity was helped by easing mortgage rates in September, sellers often adjust their pricing expectations as the weather cools and competition thins out. That seasonal shift can create pockets of opportunity for buyers who are willing to shop during a period when many would-be purchasers step back from the market.
Performance varied by region, with most areas posting gains. In the Northeast, existing-home sales rose 2.1% from August to an annual rate of 490,000 units, up 4.3% compared with September 2024. The median price climbed to $500,300, an increase of 4.1% year over year. The South—still the nation’s most active housing region—saw a 1.6% monthly gain in sales, reaching an annual pace of 1.86 million homes, a 6.9% jump from a year earlier. The median price in the South was $364,500, 1.2% higher than last year.
The West posted the strongest monthly performance, with existing-home sales jumping 5.5% from August to an annual rate of 770,000 units. Year over year, however, sales in the region were flat, reflecting the lingering affordability issues brought on by some of the country’s highest home prices. The median price in the West rose to $619,100, a modest 0.4% increase from September 2024. The Midwest was the outlier, recording a 2.1% decline in sales from August to an annual rate of 940,000 homes. Even so, sales there were still 2.2% higher than a year earlier, and the median price climbed 4.7% year over year to $320,800, suggesting that demand remains firm despite the monthly dip.
The condo and co-op segment was essentially unchanged. Sales held at a seasonally adjusted annual rate of 370,000 units, identical to both the prior month and the same period last year. Pricing in this segment was more mixed. The national median condo price stood at $360,300 in September, with NAR noting that prices in the South were actually down compared with a year ago, slipping 0.6% from September 2024. This hints at a bit more flexibility in certain pockets of the condo market, especially in regions that saw rapid price growth during the pandemic.
Buyer makeup in September reflected a slowly normalizing market. First-time buyers accounted for at least 30% of existing-home sales, up from 28% in July and 26% a year earlier. This increase suggests that moderating mortgage rates and slightly improved inventory are drawing more new entrants into homeownership, even as prices remain elevated. Cash buyers also continued to play a significant role, making up 30% of transactions, compared with 28% in August and equal to the share seen in September 2024. The prevalence of cash offers underscores the influence of investors, downsizers, and equity-rich buyers who can move quickly and are less sensitive to rate movements.
Signs of distress remained extremely limited. Only 2% of September sales were foreclosures or short sales, a figure unchanged from both August and September of last year. That low level of distressed activity reflects strong homeowner equity positions and stable employment conditions, and it helps prevent the kind of forced selling that can trigger broad price declines. Yun noted that many homeowners are financially comfortable and in no rush to sell, which contributes both to the low distress numbers and the persistent tightness in supply.
The broader policy environment remains an important backdrop. Yun observed that the recent downward trend in mortgage rates has helped closing activity, even as the government shutdown created some minor friction in certain parts of the housing market, such as delays in processing or verifying documents. Looking ahead, attention is turning to the Federal Reserve’s upcoming meeting, with widespread expectations of a quarter-point rate cut. Investors appear to be pricing in the potential for further easing in the months ahead, and Yun emphasized that lower mortgage rates are consistently one of the strongest catalysts for higher home sales.
Danielle Hale, chief economist at Realtor.com®, highlighted the importance of the seasonal window that typically opens in the fall. She noted that home sales in October and November will largely reflect purchase decisions made during what is historically one of the best times of year to buy a home, when competition is muted and inventory is relatively abundant compared with peak summer. In her view, today’s combination of mortgage rates near their lowest level in almost a year, more widespread price cuts—especially among lower-priced homes—and shifting market momentum could help sustain a modest pickup in transactions. For buyers and sellers alike, September’s numbers suggest a market that is still expensive and competitive, but gradually moving toward a healthier, more balanced footing as rates ease and inventory slowly builds.