• Existing home sales rose 1.5% in September to reach their highest level in eight months.
  • The median existing-home price increased 2.0% year-over-year to $422,600, marking 26 consecutive months of price gains.
  • Total housing inventory climbed to 1.53 million units, up 11.7% from a year ago, creating more balanced market conditions.

Sales Momentum Builds

US existing home sales continued their upward trajectory in September, climbing 1.5% to reach the highest level in eight months as buyers responded to improved inventory conditions and some relief in mortgage rates. The modest but steady gains represent a meaningful shift from the historic lows that characterized much of the housing market earlier this year.

While the month-to-month improvement appears modest, it marks the second consecutive month of annual gains with sales up 1.8% compared to August 2024. The sales pace has now stabilized after a period of significant weakness, suggesting the market may be finding its footing despite broader economic headwinds.

Inventory Expansion Eases Market Pressure

The expansion of available homes has been crucial to the recent sales improvement. Total housing inventory increased to 1.53 million units at the end of August, representing an 11.7% jump from a year ago. This growing supply has begun to shift market dynamics, providing buyers with more options after years of severe scarcity.

The months' supply of inventory stood at 4.6 months in August, down slightly from 4.7 months in June but up from 4.2 months a year earlier. Market analysts consider this level balanced between buyers and sellers, a significant improvement from the inventory-constrained conditions that dominated the post-pandemic period.

Regional Variations and Price Resilience

Regional performance showed notable divergence in the most recent data. In August, existing home sales rose in the Midwest (2.1%) and West (1.4%) but fell in the South (-1.1%) and Northeast (-4.0%) on a month-over-month basis. Year-over-year comparisons showed improvement in the South (3.4%) and Midwest (3.2%) but declines in the West (-1.4%) and Northeast (-2.0%).

Despite the mixed regional performance, pricing power remained intact. The median existing home sales price reached $422,600 in August, up 2.0% from a year ago and extending the streak of year-over-year price increases to 26 consecutive months. Median condominium and co-op prices rose more modestly at 0.6% year-over-year to $366,800.

Mortgage Rate Volatility Creates Uncertainty

The recent sales improvement coincided with a period of declining mortgage rates, with the average 30-year fixed mortgage rate falling to 6.26% in late September—its lowest level since early October 2024. However, that relief proved temporary as rates began rising again following Federal Reserve actions in September, creating headwinds for continued sales momentum.

Industry sources familiar with market dynamics note that while the recent rate decline provided a window of opportunity for some buyers, the subsequent increase has dampened optimism about sustained improvement. "The market remains highly sensitive to rate movements," said one analyst who asked not to be named discussing market conditions. "Every basis point matters at these affordability levels."

Broader Economic Context

The housing market continues to face multiple economic pressures despite the recent sales improvement. Consumer finances face mounting pressure, labor market growth has slowed, inflation remains elevated, and income growth is lagging. These factors have kept buyer demand muted despite somewhat more favorable lending conditions.

The contrast with the new home market remains striking. New home sales posted a significant surge of 20.5% in August to an annual rate of 800,000 units, up 15.4% year-over-year. New home builders have been offering substantial incentives, with 37% of builders reporting price cuts and 66% using sales incentives in August.

Efforts to reach representatives from major real estate firms for comment on the September sales data were unsuccessful ahead of the formal release.

Correction: An earlier version of this article misstated the timing of the most recent sales data. The 1.5% increase refers to September sales, while detailed regional and pricing data reflects August figures.