US Existing Home Sales Rise 1.5% September Amid Mortgage Rate Decline

U.S. existing home sales rose by 1.5% in September to a seasonally adjusted annual rate of 4.06 million units, marking the highest level since February and a 4.1% increase year-over-year, driven by lower mortgage rates and increased inventory. The median existing home price continued its 27th consecutive month of annual increases, reaching $415,200, despite affordability challenges for many buyers, especially first-time purchasers who made up only 30% of sales. Mortgage rates declined to near one-year lows around 6.19% to 6.35%, encouraging refinancing and modestly boosting buyer activity, although demand remains cautious amid economic uncertainty and a sluggish labor market. Inventory rose to a five-year high of 1.55 million homes but remains below pre-pandemic levels, resulting in a still-tight market that limits a full recovery. Analysts suggest that further Federal Reserve rate cuts and improvements in the labor market will be critical to sustaining momentum and improving affordability. Overall, the market shows signs of early recovery, with lower rates and better supply conditions potentially leading to increased sales and more balanced market dynamics moving forward.