Existing-home sales stayed below a 4 million annual pace for a second straight month in September, as rising mortgage rates cut into buyer demand and left more homes on the market.
Sales rose 1.5 percent from August to a seasonally adjusted annual rate of 3.99 million, according to closing data the National Association of Realtors reported Tuesday. Sales fell 2.2 percent from September 2025. NAR revised August’s figure lower, to 3.93 million.
“Despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year,” Lawrence Yun, NAR’s chief economist, said in a statement. “Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home.”
“Supply is not really an issue anymore,” Yun said. “So it’s really the demand that is contracting.”
During a press call Tuesday, Yun said two months below 4 million show the market is “scraping to the bottom of this home sales range.”
Yun said he would discount the monthly gain because of the August revision. He said sales last stayed below 4 million for two straight months in August and September 2024.
Lawrence Yun | Credit: AJ Canaria Creative Services
Inventory returns to pre-pandemic levels
Unsold inventory rose 1.9 percent from August to 1.60 million homes, according to NAR. That’s up 4.6 percent from a year ago. Yun said it’s the highest inventory level since November 2019. The supply equals 4.8 months at the current sales pace, unchanged from August.
“Home sales are not back up to pre-COVID, but the inventory conditions are back up to pre-COVID conditions,” Yun said.
Yun said lockbox traffic, which NAR uses to gauge how many people visit homes for sale, fell 3 percent from a year ago.
“Supply is not really an issue anymore,” Yun said. “So it’s really the demand that is contracting.”
Median time on market rose to 33 days from 31 days in August.
“Higher inventory and lengthening days on market give buyers improved negotiating power,” Yun said in a statement. “Homesellers need to be realistic about local market conditions, which could require price discounts and other incentives to attract buyers.”
Prices set a September record
The median existing-home price rose 1.3 percent from a year ago to $417,500. It was the 39th consecutive month of annual price gains, according to NAR. Yun said it’s the highest median price on record for a September.
The Northeast posted the largest annual price gain, up 4.7 percent to $523,600. Yun said multiple offers still occur in parts of the region, such as Hartford, Connecticut, and northern New Jersey. The West was the only region where prices fell, down 0.3 percent to $613,600.
Sales fell from a year ago in every price band except homes priced at $1 million or more, where sales rose 4 percent, according to Yun.
Month over month, sales rose 2.8 percent in the South and 2.8 percent in the West. They held steady in the Midwest and fell 2.1 percent in the Northeast. Sales fell from a year ago in all four regions. Yun credited job growth for the gain in the South.
NAR’s Housing Affordability Index fell to 105.4 from 106.7 a year ago. Affordability declined in the Northeast, Midwest and South, and improved 1 percent in the West. Condo and co-op sales fell 2.8 percent from August to an annual rate of 350,000 and were down 5.4 percent from a year ago.
Rates weigh on the fourth quarter
The average 30-year fixed mortgage rate was 6.86 percent in September, according to Freddie Mac. That’s up from 6.67 percent in August and 6.35 percent a year ago.
Yun said September closings reflect contracts signed in August, before the sharpest rate increases. Early figures on pending contracts point to a decline in September, he said.
He said fourth-quarter closings “will clearly be down, maybe even measurably down” if rates stay well above 7 percent.
According to NAR’s Realtors Confidence Index survey, 16 percent of contracts had delayed settlements over the past three months, up from 14 percent in August. Yun tied the increase to buyers whose rate locks did not run through the closing date. He said those buyers now face higher payments than they expected.
Yun said buyers should treat rates at or slightly above 7 percent as “the new normal.” He cited oil prices, geopolitical uncertainty, federal borrowing and signals from the Federal Reserve that it may raise rates once or twice more.
Agent outlook falls to 2023 levels
In the survey, 8 percent of agents said they expect buyer traffic to rise over the next three months. That’s down from 13 percent in August and 20 percent a year ago. NAR said higher mortgage rates have pushed agent sentiment to a level not seen since fall 2023, when mortgage rates were near 8 percent. Thirteen percent of agents said they expect seller traffic to rise, down from 17 percent in August.
Sixteen percent of homes sold above list price, down from 21 percent a year ago. Eighteen percent of buyers waived the appraisal contingency, down from 22 percent in August. Seven percent of contracts were terminated in the past three months, up from 6 percent a year ago.
First-time homebuyers made up 31 percent of sales, up from 30 percent in August. Investors and second-home buyers made up 20 percent, up from 15 percent in August and a year ago.
Yun said investors are “stepping in a bit.”
Purchases for vacation use rose to 8 percent from 5 percent a year ago. Cash sales made up 27 percent of transactions, down from 30 percent a year ago. Distressed sales held at 2 percent.
Yun said the market has become tougher for people who need to sell because of a job move, divorce or a death in the family. He said the nation’s 87 million homeowners have gained about $15 trillion in combined housing wealth since before the pandemic, or about $170,000 each, and most of them are comfortable.
By the numbers
- 3.99 million: Seasonally adjusted annual sales pace, up 1.5 percent from August and down 2.2 percent from a year ago
- 1.60 million: Homes for sale, up 4.6 percent from a year ago
- 4.8 months: Supply at the current sales pace
- $417,500: Median existing-home price, up 1.3 percent from a year ago
- 33 days: Median time on market, up from 31 days in August
- 6.86 percent: Average 30-year fixed mortgage rate in September, according to Freddie Mac
- 31 percent: Share of sales to first-time homebuyers
- 20 percent: Share of sales to investors and second-home buyers, up from 15 percent
- 8 percent: Share of agents who expect buyer traffic to rise in the next three months
NAR will release its annual Profile of Home Buyers and Sellers on Nov. 5, and its October existing-home sales data on Nov. 12. Pending home sales data comes out next week.
