An “Open House” sign is posted near a single-family home for sale in Pasadena, California on August 22, 2025.
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Existing home sales rose 1.5% in September from August to a seasonally adjusted annual rate of 4.06 million units, according to the National Association of Realtors. Although it was slightly below analysts’ expectations, it was the best pace in seven months.
Sales increased by 4.1% compared to September last year.
By region, sales were strongest in the South and Northeast on an annual basis. Since August, sales have been strongest in the West, with the Midwest actually down slightly, making it the only region to see a monthly decline.
This number is based on the number of deals closed, so people likely signed contracts in July and August, when mortgage rates were falling but not as low as they are now. The average interest rate for a 30-year fixed rate started at 6.67% in July and is now 6.17%, according to Mortgage News Daily.
“As expected, lower mortgage rates are boosting home sales,” said NAR Chief Economist Lawrence Yun. “Improving housing affordability is also contributing to the increase in sales.”
Inventory continued to increase, with sales volume reaching 1.55 million units as of the end of September, an increase of 14% from the previous year. Historically, this is still low. At the current pace of sales, there will be a 4.6-month supply of homes for sale. A six-month supply is considered balanced between buyers and sellers.
“Although inventories are at a five-year high, they are still below pre-coronavirus levels,” Yun added. “Many homeowners are financially comfortable, and as a result distressed properties and forced sales are rare. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.”
Supply shortages continue to pressure prices. The median price of homes sold in September was $415,200, up 2.1% from the same month last year and marking the 27th consecutive month of annual increases. Prices are up 53% compared to pre-COVID-19 levels.
Sales continue to see the greatest growth at the high end of the market, likely due to increased supply in these tiers. Sales of homes priced over $1 million increased by 20% from a year earlier, while sales of homes priced under $100,000 increased by just under 3%.
First-time home buyers are seeing some benefit, perhaps due to lower mortgage rates. It accounted for 30% of sales in September, up from 26% a year ago.
Approximately 30% of sales were paid entirely in cash. Homes stay on the market for an average of 33 days, up from 28 days a year ago.
