Sales of previously owned U.S. homes increased in September, giving real estate businesses a modest lift and buyers more choice, but rising mortgage rates are making purchases harder to finance. The National Association of Realtors said Tuesday that sales rose 1.5% from August while remaining 2.2% below a year earlier.
The seasonally adjusted annual sales rate reached 3.99 million. That is the number of homes that would change hands over a year if September’s adjusted pace continued, rather than the number actually sold during the month.
The gain followed a downward revision to August’s sales, according to Associated Press reporting. It therefore represents an improvement from a weaker comparison month, rather than evidence that the market has moved into a sustained recovery.
NAR Chief Economist Lawrence Yun said August and September were the two slowest sales months of the year. He warned that further increases in mortgage rates in recent weeks meant fewer buyers could qualify to purchase a home.
The financing picture has become more difficult since September. Freddie Mac’s 30-year fixed mortgage rate averaged 6.86% that month, up from 6.67% in August and 6.35% in September 2025. Its latest weekly survey, released Oct. 8, put the rate at 7.40%.
That difference matters to buyers evaluating homes today. September’s sales report measures completed transactions, so it does not fully capture the effect of the more recent increase in borrowing costs.
Consider a buyer purchasing at September’s national median price of $417,500 with a 20% down payment. The down payment would be $83,500, leaving a $334,000 mortgage.
On a 30-year loan at 6.86%, principal and interest would total approximately $2,191 a month. At 6.35%, the same loan would cost about $2,078, a difference of roughly $113 a month, or $1,350 a year.
At the latest weekly average of 7.40%, the payment would rise to about $2,313. These calculations hold the loan amount constant to isolate the effect of interest rates and exclude property taxes, homeowners insurance, association dues and other costs.
Home prices offered little relief nationally. September’s median rose 1.3% from a year earlier, marking the 39th consecutive month of annual price gains and a record for the month of September. The median is the midpoint of completed sales, with half selling for more and half for less.
Buyers did gain options. Inventory reached 1.60 million homes, up 1.9% from August and 4.6% from a year earlier. At September’s sales pace, that represented 4.8 months of supply, unchanged from August but above the 4.5 months recorded a year earlier.
Properties spent a median of 33 days on the market, compared with 31 days in August. Longer listing periods can give shoppers more time to compare homes and negotiate, though national averages do not establish conditions in every neighborhood.
“Higher inventory and lengthening days on market give buyers improved negotiating power,” Yun said. He urged sellers to be realistic about local conditions, including the possibility of price discounts or other incentives.
The distinction between price and monthly cost remains crucial. A negotiated discount can help, but a higher mortgage rate can absorb some of that benefit. Buyers need to evaluate the full payment rather than the asking price alone.
Single-family home sales increased 2% to an annual rate of 3.64 million, while condominium and co-op sales fell 2.8% to 350,000. First-time buyers accounted for 31% of transactions, up from 30% in August.
Investors and second-home buyers represented 20% of purchases, compared with 15% a month earlier. Cash transactions made up 27% of sales, while distressed sales, including foreclosures, remained at 2%.
Regional results also differed. Sales rose 2.8% in both the South and West, held steady in the Midwest and fell 2.1% in the Northeast. All four regions recorded lower sales than a year earlier.
The Northeast posted the largest annual median-price increase, up 4.7% to $523,600. The Midwest rose 3.1% to $329,600, the South edged up 0.2% to $361,000, and the West declined 0.3% to $613,600.
NAR’s affordability index fell to 105.4 from 106.7 a year earlier, reinforcing the gap between expanding choice and the ability to finance a purchase.
October’s completed sales will provide the next test of whether improved inventory can offset higher borrowing costs. NAR is scheduled to release that report Nov. 12 at 10 a.m. Eastern time.
JBizNews Desk | Washington
© JBizNews.com. All rights reserved. This article is original reporting by JBizNews Desk. Unauthorized reproduction or redistribution is strictly prohibited.
