Sales of previously owned U.S. homes experienced a notable increase in September, reaching their highest pace since February, as lower mortgage rates and more available properties invigorated homebuyers. The National Association of Realtors reported a 1.5% rise in existing home sales from August to a seasonally adjusted annual rate of 4.06 million units. This marks a significant improvement of 4.1% compared to the same time last year, although it slightly missed the economists’ expectations of approximately 4.07 million units.
The national median sales price for homes increased by 2.1% year-over-year, standing at $415,200. This uptick signifies the 27th consecutive month of annual price growth in the housing sector.
The U.S. housing market has had a challenging period since 2022, when mortgage rates began to climb from historically low levels, resulting in a significant slump in sales. Last year saw sales of existing homes plummet to their lowest in nearly three decades. However, a shift occurred when mortgage rates began to decrease in July, coinciding with the Federal Reserve’s recent reduction of its main interest rate due to concerns regarding the U.S. job market.
The homes sold in September likely went under contract during July and August, a period when the average rate for a 30-year mortgage fluctuated between 6.75% and 6.56%. The downward trend in mortgage rates accelerated in September, dropping the average to as low as 6.27% last week, reigniting interest among homebuyers.
This resurgence in sales seems to signal a possible stabilization in the housing market, bringing renewed optimism to both buyers and sellers as mortgage conditions improve and inventory levels increase. As the market adapts to fluctuating rates, there is hope that this momentum can lead to a more robust recovery in the coming months.