Existing home sales in the U.S. climbed 1.5% in September, reaching a seasonally adjusted annual rate of 4.06 million units, the highest level seen since February of this year. This marks a 4.1% increase compared to September 2024. The rise in sales was supported by increases across the Northeast, South, and West regions, while the Midwest experienced a slight decline. Despite the uptick in sales, the overall market continues to be shaped by mixed signals including economic uncertainty and a labor market that has yet to show robust growth.
A key factor influencing this rise is falling mortgage rates, which have made home buying more affordable just as many prospective buyers have been waiting for a better opportunity to enter the market. According to the National Association of Realtors, the median existing home sales price rose 2.1% year-over-year to $415,200. This marks the 27th consecutive month of annual price gains reflecting a still tight, though improving, housing supply and persistent demand.
Inventory gains are particularly notable. The total supply of homes available for sale increased 14% compared to a year earlier, reaching 1.55 million units. This is the highest inventory level seen in five years yet still shy of pre-pandemic volumes. It translates to a 4.6-month supply of unsold homes, up from 4.2 months in September 2024. This growing inventory suggests that homeowners are increasingly willing or able to list their homes, potentially due to improved financial stability or shifting market expectations. The increase in available homes could help moderate price growth going forward and provide more options for buyers, relieving some of the affordability pressures that have plagued the market for years.
It’s worth considering the historical context as well. Looking back, sales had been sluggish through much of 2024 and early 2025, hindered primarily by elevated mortgage rates that pushed monthly payments beyond many buyers’ budgets. The recent easing in mortgage rates, combined with the bump in inventory, has started to shift momentum. However, the year-over-year price increase indicates the supply has not yet caught up fully with demand, keeping prices on an upward trajectory for now.
Sales patterns also reveal a nuanced market. Single-family homes, which dominate the market, saw a 1.7% sales increase month-over-month and a 4.5% rise year-over-year, with a median price of $420,700. Condominiums and co-ops, in contrast, experienced little change in sales volume and a slight dip in median price, down 0.6% to $360,300 compared to last year, signaling different dynamics in various segments of the housing market.
Mortgage rates remain a critical factor to watch. With the 30-year fixed mortgage rate hovering around 6.27%, the market faces a delicate balance. Although rates have come down from their 2024 highs, they remain historically elevated, which could dampen buyer enthusiasm and cap the upside for gains in sales and prices in the months ahead.
The boost in sales volume combined with increased inventory suggests a market that is gradually normalizing after years of extreme low supply and record-high prices. As the inventory climbs, buyers gain more choice, and the frenzy that characterized the peak pandemic years starts to ease. For sellers, this means more competition and the potential for longer market times, but prices are still climbing, just at a slower pace.
Ultimately, the current data tell the story of a housing market in transition. Sales are rising, inventory is expanding, and prices continue to climb, albeit at a moderated pace. For prospective buyers and sellers, the message is clear: conditions are improving but still require careful consideration of timing and affordability given the persistent influence of mortgage costs and economic uncertainty.
This month’s existing home sales report offers a snapshot of a housing market that is slowly adapting to the new economic realities, balancing stronger supply against ongoing demand, and setting the stage for a potentially more stable market environment going forward.
