NAR Existing-Home Sales Report Shows 1.5% Increase in September

Existing-home sales in September increased by 1.5% month-over-month to a seasonally adjusted annual rate of 4.06 million, marking a 4.1% rise year-over-year, according to the National Association of REALTORS®. This growth is primarily attributed to falling mortgage rates and improved housing affordability, as noted by NAR Chief Economist Dr. Lawrence Yun. The median existing-home price climbed 2.1% year-over-year to $415,200, extending a 27-month streak of annual price increases, while total housing inventory reached 1.55 million units, up 14.0% from a year ago and representing a five-year high, though still below pre-COVID levels.

Analysis

Existing-home sales increased by 1.5% month-over-month in September to a seasonally adjusted annual rate of 4.06 million, representing a 4.1% year-over-year rise. This growth is attributed to falling mortgage rates, which averaged 6.35% in September, down from 6.59% in August. The median existing-home price continued its upward trend, reaching $415,200, a 2.1% increase year-over-year and marking the 27th consecutive month of annual price appreciation.

Total housing inventory rose to 1.55 million units, a 1.3% increase month-over-month and a significant 14.0% rise year-over-year, reaching a five-year high. Despite this increase, inventory remains below pre-COVID levels, maintaining a 4.6-month supply of unsold homes. The market continues to see low distressed sales at 2%, indicating financial comfort among homeowners and limited forced selling.

NAR Chief Economist Dr. Lawrence Yun highlighted improving housing affordability and falling mortgage rates as key drivers for the sales uptick. While sales increased month-over-month in the Northeast, South, and West, they declined in the Midwest. Year-over-year, sales growth was observed across most regions, with the West remaining flat, suggesting varied regional market dynamics beneath the national positive trend.

Key Decisions for Investors

• Investors should consider the continued resilience in existing-home sales and median price appreciation as indicators of sustained housing market demand, despite higher year-over-year mortgage rates.
• Monitor inventory levels, which are increasing but remain below pre-COVID benchmarks, as a key factor influencing future price growth and market liquidity.
• Given regional disparities in sales performance, investors may benefit from a granular approach, identifying specific markets with stronger growth trajectories.