Existing Home Sales Tick Up in September, But Housing Market Still Stuck in Neutral

Existing-home sales posted a modest uptick in September, signaling some renewed buyer activity as mortgage rates eased slightly and affordability improved. However, despite the monthly increase, the broader housing picture remains largely unchanged sales levels continue to hover well below their historical averages as many homeowners remain unwilling to give up ultra-low mortgage rates secured during the pandemic.

According to the National Association of Realtors (NAR), sales of previously owned homes rose 1.5% in September to a seasonally adjusted annual rate of 4.06 million units. That marks a 4.1% increase from a year earlier and the highest pace in seven months. Still, sales remain far beneath the 5–5.5 million range that characterized the years before COVID-19.

“As anticipated, falling mortgage rates are lifting home sales,” said Lawrence Yun, NAR’s Chief Economist. “Improving affordability is also playing a role, especially as more inventory becomes available. However, even with these gains, we’re still dealing with a market that’s constrained compared to pre-pandemic levels.”

Yun added that inventory is sitting near a five-year high, though still below long-term norms. “Many homeowners remain financially comfortable and have little incentive to sell. That’s why we continue to see few distressed or forced sales. At the same time, home prices keep edging higher, contributing to household wealth across most regions.”

Regional Performance: West Leads, Midwest Slips

The market showed a mixed regional performance in September. The West posted the strongest gains, while the Midwest slipped slightly.

Region	Sales (annual rate)	MoM Change	Median Price	YoY Price Change
Northeast	490,000	+2.1%	$500,300	+4.1%
Midwest	940,000	-2.1%	$320,800	+4.7%
South	1.86 million	+1.6%	$364,500	+1.2%
West	770,000	+5.5%	$619,100	+0.4%

The West’s rebound reflects stronger buyer confidence as home prices in some high-cost markets stabilize and more listings enter the market. The Midwest, on the other hand, continues to feel the effects of tighter affordability and limited new inventory.

National Snapshot: Inventory Builds, Prices Keep Climbing

On the national level, total housing inventory rose slightly to 1.55 million units, up 1.3% from August and 14% higher than a year ago. That translates to a 4.6-month supply at the current sales pace—unchanged from last month but still short of the six months typically considered a balanced market.

Home prices, meanwhile, continued their steady ascent, with the median existing-home price hitting $415,200, up 2.1% from a year ago. This marks the 27th consecutive year-over-year price gain, underscoring the stubborn imbalance between supply and demand.

Other key indicators showed only slight shifts:

• Time on market: 33 days (up from 31 in August, and 28 a year ago)
• First-time buyers: 30% of sales (up from 26% last year)
• Cash sales: 30% (steady year-over-year)
• Investor/second-home buyers: 15% (down from 21% last month)
• Distressed sales: 2% (unchanged)

The rise in first-time buyer participation suggests that easing mortgage rates now hovering near their lowest levels since early 2024 are beginning to draw sidelined buyers back into the market

Affordability Improving, But Challenges Persist

The moderation in borrowing costs has provided some relief to buyers who were priced out earlier in the year. Rates on a 30-year fixed mortgage recently slipped below 6.2%, giving more households a chance to qualify for financing. Yet affordability remains stretched, with home prices still more than 50% above pre-pandemic levels in many metro areas.

Inventory growth has also helped, though much of the new supply is coming from move-up sellers and investors rather than entry-level homes. Builders are slowly expanding production of smaller, more affordable properties, but higher construction costs and zoning constraints continue to limit progress.

“The market is thawing but not yet warming,” said a senior housing analyst at Real Estate Insights. “Buyers are responding to slightly lower rates, but inventory, affordability, and economic uncertainty are keeping a lid on momentum.”

What’s Next?

Looking ahead, housing economists expect modest gains in home sales through the end of the year if mortgage rates continue to drift lower. However, the overall market recovery will likely remain uneven.

With inflation trending down and the Federal Reserve poised to cut rates again, further improvement in borrowing costs could unlock more pent-up demand. Still, many existing homeowners with sub-4% mortgages remain reluctant to sell, keeping a lid on turnover.

In short, September’s increase in sales signals progress—but not a turning point. The housing market remains caught between two forces: improving affordability and the inertia of locked-in homeowners.

“Optimists can point to a rebound,” said one market observer, “but pragmatists will note that we’re still in historically low territory. It’s progress, yes but it’s slow, steady progress, not a breakout.” For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.