Home sales rebounded last month as lower mortgage rates and higher inventory kept some buyers out of the bank.
Sales of existing homes rose 1.5% in September to a seasonally adjusted annual rate of 4.06 million, the highest level since February, according to data from the National Association of Realtors released Thursday. Year over year, they are up 4.1%.
Homes that sold in September typically went under contract a month or two in advance. During that period, mortgage rates fell from around 6.7% to around 6.3%. The current lower rates may bode well for the future of the market, which remains sluggish by historical standards.
More information: How do historical mortgage rates compare to current rates?
“Certainly mortgage rates could help provide more stimulus for home buying activity, but at the same time, we have a government shutdown that’s causing a little bit of friction,” said Lawrence Yun, chief economist at the National Association of Realtors.
Inventory continued to increase, giving buyers more to choose from. In September there were 1.55 million homes for sale, 14% more than the previous year and 1.3% more than in August.
Many of the recent gains have come from selling at the top end of the market, as the wealthiest Americans continue to benefit from stock market gains. Sales of homes over $1 million increased 20% from a year ago, followed by the $750,000 to $999,999 category, which increased 14.4%.
Gains were slower at lower prices. First-time homebuyers, who often purchase lower-priced homes, accounted for 30% of sales in September, a slight increase from recent months but still well below historical averages, which are between the high 30% and low 40%.
“Thirty percent still implies that first-time buyers are struggling to enter the market,” Yun said.
More information: How to buy a house for the first time in 2025
claire boston He is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
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