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Lower mortgage rates push home sales higher in September
An ‘Open House’ sign is posted near a single family home for sale on Aug. 22, 2025 in Pasadena, California.
Mario Tama | Getty Images
Sales of previously owned homes rose 1.5% in September from August to a seasonally adjusted, annualized rate of 4.06 million units, according to the National Association of Realtors. That is slightly less than the analysts were forecasting, but the highest pace in seven months.
Sales were 4.1% higher compared with September of last year.
Regionally, on an annual basis, sales were strongest in the South and Northeast. From August, sales were strongest in the West and actually fell slightly in the Midwest, the only region to see a monthly decline.
This count is based on closings, so people signing contracts likely in July and August, when mortgage rates were coming down but were not as low as they are now. The average rate on the 30-year fixed started July at 6.67% and is now at 6.17% according to Mortgage News Daily.
“As anticipated, falling mortgage rates are lifting home sales,” said Lawrence Yun, NAR’s chief economist. “Improving housing affordability is also contributing to the increase in sales.”
Inventory continued to make gains, up up 14% from a year ago to 1.55 million units for sale at the end of September. That is still lean historically. At the current sales pace, there is a 4.6-month supply of homes for sale. A six-month supply is considered balanced between buyer and seller.
“Inventory is matching a five-year high, though it remains below pre-Covid levels,” Yun added. “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.”
Still tight supply continues to pressure prices. The median price of a home sold in September was $415,200, up 2.1% year-over-year and the 27th consecutive month of annual gains. Prices are 53% higher than pre-Covid levels.
Sales continue to see the biggest gains on the high end of the market, likely due to more supply in those tiers. Sales of home priced above $1 million rose 20% from the year before, while sales of homes priced below $100,000 were up just under 3%.
First-time homebuyers are making some gains, likely due to falling mortgage rates. They made up 30% of September sales, up from 26% the year before.
About 30% of sales were made all in cash. Homes are sitting on the market longer, an average 33 days, up from 28 a year ago.
