The inventory improved, which gave buyers more negotiating power, resulting in a rise in existing home sales after three months of declines.
The for-sale inventory has reached its highest level in over a decade, and homes are lingering on the market for longer as buyers wait for rate relief.
August and September sales were the slowest this year, despite the increase.
Home sales are anticipated to remain stagnant in the coming months, as mortgage rates have risen above 7% since mid-September.
According to the National Association of Realtors (NAR), the seasonally adjusted annual rate of 3.99 million for total existing home sales, which encompasses single-family homes, townhomes, condominiums, and co-ops, increased by 1.5% in September.
This was the second-lowest level since July 2025 and the third time since October 2024 that sales fell below 4.0 million.
Sales decreased by 2.2% from the previous year on a year-over-year basis.
In September, the inventory of existing homes reached 1.60 million units, representing a 1.9% increase from August and a 4.6% increase from the previous year.
September unsold inventory is at a 4.8-month supply, which is unchanged from last month but has increased from 4.5-months a year ago, at the current sales rate.
This was the highest months’ supply since November 2015 and was consistent with the previous month.
A balanced market is generally defined as having an inventory of 4.5 to 6 months’ supply.
Homes remained on the market for a median of 33 days in September, which is an increase from the 31 days in the previous month but remains consistent with September 2025.
In September, the percentage of individuals who were purchasing for the first time was 31%.
The share increased from 30% in August and a year ago.
September’s all-cash sales share was 27% of transactions, which was consistent with the previous month and decreased from 30% in September 2025.
Changes in interest rates have a lesser impact on purchasers who pay in cash.
The median sales price of all existing homes in September was $417,500, a 1.3% increase from the previous year.
This month represents the 39th consecutive month of year-over-year growth.
In September, the median condominium/co-op price increased by 1.2% from the previous year to $363,700.
In the majority of markets, the recent increase in home inventory will result in a downward pressure on resale home prices in 2026.
In September, the four main regions experienced a mixed bag of existing home sales.
Sales increased in the South (2.8%) and West (2.8%), while they decreased in the Northeast (-2.1%).
Sales in the Midwest remained constant.
Sales decreased in all four regions on a year-over-year basis, with the South experiencing a 0.5% decline and the Midwest experiencing a 2.1% decline.
The Pending Home Sales Index (PHSI) is a forward-looking indicator that is calculated using signed contracts.
In August, the PHSI increased from 71.0 to 71.2.
The National Association of Realtors’ data indicates that pending sales were 4.7% lower than they were a year ago on a year-over-year basis.
[Read more about this topic on eyeonhousing.org]