U.S. existing-home sales climbed in September to their strongest pace since February as buyers took advantage of slightly lower mortgage rates, a sign that the housing market may be thawing after a long freeze.
Sales of previously owned homes rose 1.5 percent from August to a seasonally adjusted annual rate of 4.06 million, the National Association of Realtors said Thursday. That matched economists’ expectations and reversed the prior month’s decline.
The increase reflected contracts signed earlier in the summer, when mortgage rates began to edge down from near-7 percent levels. The average 30-year fixed rate has since fallen to 6.19 percent, its lowest in more than a year, according to Freddie Mac.
“As anticipated, falling mortgage rates are lifting home sales,” said NAR Chief Economist Dr. Lawrence Yun. “Improving housing affordability is also contributing to the increase in sales.”
Still, affordability remains the market’s biggest constraint. The median existing-home price rose 2.1 percent from a year earlier to $415,200.
Buyers are also contending with tight supply. Inventory stood at 1.55 million homes at the end of September, up 1.3 percent from August and 14 percent from a year earlier—an improvement but still below pre-pandemic norms. Many homeowners remain reluctant to sell because they hold mortgages with rates near 3 percent.
By region, sales were strongest in the West, where sales from 5.5 percernt, and the South, where they rose 1.6 percent. Sales in the Northeast rose 2.1 percent. The Midwest saw a decline of 2.1 percent.
First-time buyers accounted for 30 percent of transactions, up from 26 percent a year ago, and all-cash sales made up roughly the same share, underscoring the continued presence of investors and wealthier buyers.
Economists say mortgage rates would likely need to fall below 6 percent—and possibly closer to 5.5 percent—to spur a stronger rebound. A weakening labor market or uncertainty from the ongoing federal shutdown could weigh on demand in coming months.
Even so, the modest pickup in sales and the growing pool of available homes suggest that conditions are gradually normalizing after three years of near-paralysis in the resale market.
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