US Home Sales Surge in September as Mortgage Rates Ease

In September, the U.S. housing market experienced a notable increase in sales of previously occupied homes. This surge was largely attributed to declining mortgage rates and an uptick in available properties. According to the National Association of Realtors (NAR), existing home sales rose by 1.5% from August to a seasonally adjusted annual rate of 4.06 million units. This marks the fastest sales rate recorded since February.

Year-over-year, sales increased by 4.1% compared to September of the previous year. Despite this upward trend, the figures fell short of the 4.07 million sales pace anticipated by economists, as reported by FactSet.

Median Home Prices and Longer Sales Duration

The national median sales price for homes reached $415,200 in September, reflecting a 2.1% rise from the previous year. This increase marks the 27th consecutive month of annual price hikes, with current prices being the highest for any September since 1999. Lawrence Yun, NAR’s chief economist, commented, “The home sales in September showed an increase, but I would not characterize it as a breakout.” According to him, the data indicates that consumers respond to lower mortgage rates.

Shifting Market Dynamics

The U.S. housing market has faced challenges since 2022, primarily due to rising mortgage rates. These rates, which started to decline in July, prompted a modest increase in sales. The 30-year mortgage rate averaged between 6.75% and 6.56% during the months leading up to September, while recent weeks saw a drop to as low as 6.27%.

• Current Market Insights:
• Existing home sales: 4.06 million units in September
• Year-over-year sales increase: 4.1%
• Median sales price: $415,200 (2.1% increase)
• Inventory of unsold homes: 1.55 million (1.3% increase from August)
• Average time on market: 33 days

Although lower rates have expanded purchasing power, many potential buyers still struggle with affordability. The median home sales price has escalated by 53% over the last six years, creating obstacles for first-time buyers, who accounted for only 30% of sales last month, compared to a historical average of 40%.

Economic Outlook

As of September, the inventory of homes available for sale matched a five-year high, totaling 1.55 million. Nonetheless, this figure is still considerably lower than the pre-pandemic average of about 2 million homes. The current inventory represents a 4.6-month supply based on sales pace, which indicates a market that leans toward favoring sellers.

Despite the decline in mortgage rates, cash transactions comprised 30% of home sales last month, pointing to a growing trend where buyers opt for cash purchases over financing. As we move towards the end of the year, expectations remain mixed. Lisa Sturtevant, chief economist at Bright MLS, notes that economic uncertainties may lead to steady sales activity as buyers continue to navigate fluctuating market conditions.