Key facts
- US existing home sales rose 1.5% in September to 3.99 million units.
- Sales were down 2.2% year-over-year in September.
- The 30-year fixed mortgage rate averaged 7.40% last week.
- Existing housing inventory increased 1.9% to 1.60 million units.
- The median existing home price rose 1.3% year-over-year to $417,500.
- First-time buyers accounted for 31% of sales.
US existing home sales unexpectedly rose in September, defying economists' expectations, as an increase in available inventory provided more choices for buyers. However, the overall trend remains subdued due to persistently high mortgage rates.
According to the National Association of Realtors, home sales increased by 1.5% last month to a seasonally adjusted annual rate of 3.99 million units. This figure was higher than the 3.95 million units forecast by Reuters poll participants. Despite this monthly gain, sales were down 2.2% compared to the same period last year, marking August and September as the two slowest months for home sales this year.
Lawrence Yun, the NAR's chief economist, noted that recent increases in mortgage rates are limiting the number of buyers who can afford a home. The average 30-year fixed mortgage rate climbed to 7.40% last week, the highest since November 2023, and has risen by 142 basis points since late February, tracking higher US Treasury yields influenced by inflation concerns and geopolitical events.
Sales saw increases in the South and West regions, while the Northeast experienced a decline and the Midwest remained unchanged. The existing housing inventory grew by 1.9% to 1.60 million units, the highest level since November 2019, and was 4.6% higher than a year ago. At the current sales pace, it would take 4.8 months to sell all available inventory, unchanged from August but up from 4.5 months a year ago.
The median existing home price in September increased by 1.3% from the previous year to $417,500, marking the highest price for any September on record. First-time buyers represented 31% of sales, a slight increase from August and the previous year, though a 40% share is considered necessary for a robust market. The median time properties spent on the market increased to 33 days from 31 in August, while distressed sales remained at 2% and cash transactions held steady at 27%. Individual investors or second-home buyers accounted for 20% of transactions, up from 15% in August.