Home Sales Rise Unexpectedly in September in Defiance of Surging Mortgage Rates

Existing-home sales ticked upward in September, but buyers and sellers are showing signs of fatigue with the difficult housing market.

Data from the National Association of Realtors® shows existing-home sales rose 1.5% on a monthly basis to a seasonally adjusted annual rate of 3.99 million. This is an increase from August, but both months were the two slowest of the year for home sales, NAR Chief Economist Lawrence Yun said in a call with reporters.

Year over year, home sales are down 2.2%, and 3.9% in raw numbers. Home prices are rising, but at a very minimal pace. In September, the median price increased 1.3% to $417,500. That's a record high for September, though it is down from the summer price surges.

Meanwhile, inventory increased 1.9% to 1.60 million units, or 4.8 months' supply. That's the highest inventory level since November 2019.

"Let's be mindful, there are 87 million homeowners in the country, and they are mostly very comfortable because they have seen substantial wealth gain in recent years compared to pre-pandemic," Yun said. "It's just tough market condition for homebuyers and home sellers."

The average 30-year fixed-rate mortgage in September was 6.86%, according to Freddie Mac. That's up from 6.67% in August and up from 6.35% one year ago. Since then it has risen to 7.40% as of Oct. 8.

Realtor.com® Chief Economist Danielle Hale says the typical U.S. asking price has been softer in 2026, according to Realtor.com data, lagging behind by 1.4% in September.

"While 6.7% looks like a good mortgage rate given that the market is well above 7% today, in early August, this rate was a 2026 high and the first time in 44 weeks that mortgage rates had surpassed their prior-year level," Hale says. "Home sales are likely to remain relatively low for the rest of this year as mortgage rates remain high."

Headwinds

Housing affordability continues to differ by region. In the supply-constrained Northeast, prices continue to rise. The affordability index there dropped by 4.5%. The Midwest affordability index dropped 3.1%, and in the South, the index dropped 0.4%. In the West, affordability improved 1%.

The average homeowner who isn't in the market is still content with the value of their home, Yun said. He noted $15 trillion in wealth gain in the national housing market, which amounts to $170,000 per homeowner.

"People who need to sell their home, the market is tougher," Yun said.

The months ahead could prove difficult. Realt estate agents are pessimistic about the outlook on sales activity in three months. Only 8% of them indicated they expect an increase in home sales activity in the next three months. That's the lowest level of confidence since 2023, a year also marked by climbing mortgage rates.

Yun said there has been an increase in delayed contracts, as the rising rates make it more difficult for people who are in the market.

"Mortgage rate is the magical factor that drives sales, and mortgage rate right now is just rising and rising," Yun said.

Hale, though, was hopeful given the share of first-time homebuyers edged higher. In September, first- time homebuyers accounted for 31% of the sales, up from 30% in the prior month and year.

"We’re past the worst of the starter-home supply crunch nationwide, which may help entry-level buyers gain a foothold, but the local picture remains mixed," Hale says.