Existing home sales rose to a seven-month high in September as mortgage rates eased and inventory improved, according to the National Association of Realtors (NAR). Resale inventory matched to the highest level since May 2020, though it remained below pre-pandemic levels.  Mortgage rates hovered between 6.5% and 7% earlier this year due to ongoing economic and tariff uncertainty. However, rates recently fell below 6.5% for the first time this year as the Fed resumed rate cuts at its September meeting. Last week, the average mortgage rate decreased to a nearly one-year low of 6.27%. With additional rate cuts expected in coming months, lower mortgage rates and improved inventory should bring more buyers and sellers into the market. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 1.5% to a seasonally adjusted annual rate of 4.06 million in September. On a year-over-year basis, sales were 4.1% higher than a year ago. The existing home inventory level was 1.55 million units in September, up 1.3% from August and up 14.0% from a year ago. At the current sales rate, September unsold inventory sits at a 4.6-months’ supply, unchanged from July and August but up from 4.2-months in September 2024. Inventory between 4.5 to 6 month’s supply is generally considered a balanced market. Homes stayed on the market for a median of 33 days in September, up from 31 days last month and 28 days in September 2024. The first-time buyer share was 30% in September, up from 28% in August and 26% from a year ago. The September all-cash sales share was 30% of transactions, up from 28% in August but unchanged from a year ago. All-cash buyers are less affected by changes in interest rates. The September median sales price of all existing homes was $415,200, up 2.1% from last year. This marks the 27th consecutive month of year-over-year increases. The median condominium/co-op price in September was down 0.6% from a year ago at $360,300.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025. Geographically, three of the four regions saw an increase in existing home sales in September, with an increase of 5.5% in the West, 2.1% in the Northeast, and 1.6% in the South. Meanwhile, sales in the Midwest fell 2.1%. On a year-over-year basis, sales were up in the South (6.9%), Northeast (4.3%) and the Midwest (2.2%), while sales were unchanged in the West. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 71.8 to 74.7 in August, suggesting lower mortgage rates are bringing more buyers back into the market. On a year-over-year basis, pending sales were 3.8% higher than a year ago, according to the National Association of Realtors’ data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.