Existing home sales in the United States rose 1.5% in September to a seasonally adjusted annual rate of 3.99 million. Despite this monthly increase, sales remain 2.2% lower than they were at this time last year.
Market Dynamics and Borrowing Costs
Data from the National Association of Realtors (NAR) shows a challenging environment for homebuyers. While the 1.5% monthly increase offers a small sign of growth, sales remain near their lowest levels of the year. Economists attribute this stagnation to rising mortgage rates, which climbed from below 7% at the start of September to approximately 7.5% by the end of the month.
September’s sales figures primarily reflect contracts signed in August. Because interest rates were lower during that period than they were at the end of September, those earlier conditions likely supported the finalized purchase agreements.
Inventory and Pricing Trends
Home prices remain resilient despite cooling demand. The median sales price for an existing home reached $417,500, a 1.3% increase from last year. According to data dating back to 1999, this is an all-time high for the month of September.
Inventory levels have improved slightly, providing more options for buyers. Key supply metrics include:
- Unsold home inventory rose 1.9% from August to September.
- Total inventory is up 4.6% compared to September of the previous year.
- There is currently a 4.8-month supply of homes available at the current sales pace.
The Outlook for Homebuyers
The housing market has faced a downturn since 2022, largely due to the shift from pandemic-era interest rates to current, higher borrowing costs. As rates fluctuate, many prospective buyers are choosing to pause their search until the market stabilizes.
For those still searching, the current inventory-the highest level since November 2019-means properties are staying on the market longer. This provides more selection for buyers who can manage current mortgage rates or those making all-cash transactions.
As the year concludes, analysts are monitoring inflation, bond yields, and Federal Reserve policy. These factors will be critical in determining the future trajectory of mortgage rates and home sales as the market moves toward 2027.
