Monthly existing-home sales declined by 1% in September, with year-over-year sales down 3.5%, according to the National Association of Realtors (NAR). "Home sales have been essentially stuck at a four-million-unit pace for the past 12 months," said Lawrence Yun, chief economist for the NAR. "But factors usually tied to higher home sales are emerging." Rising inventory, declining mortgage rates, and steady job growth are signs that could drive home sales upward.

More Variety for Buyers

The rise in inventory is benefiting buyers by offering more options to consider, according to Yun, who noted, "It gives consumers more properties to view before making a decision." By the end of September, total housing inventory reached 1.39 million units, up 1.5% from the previous month and an impressive 23% from a year ago. This represents a 4.3-month supply at the current sales pace, compared to a 4.2-month supply a month earlier and a 3.4-month supply a year ago. Notably, 30% of September transactions were all-cash sales, with investors and second-home buyers likely among the purchasers.

Moderating Prices Offer Relief

Median home prices rose by just 3% from September 2023. According to Yun, this slower pace of price growth should be welcome news for buyers: "With wage growth now outpacing home appreciation, housing affordability will improve." Additionally, mortgage rates are beginning to see modest declines, further supporting affordability. Buyers entering the market can either lock in current rates or explore adjustable-rate mortgage options to help manage monthly payments as affordability continues to improve.

Sellers Need a Realistic Price and Patience

With the market shifting toward buyers, sellers are facing the realities of a slower pace. Homes now stay on the market an average of 28 days, up from 21 days a year ago, according to the REALTORS® Confidence Index. To attract serious buyers, sellers should consider competitive pricing and emphasize their property's unique features. Additional incentives, such as closing cost assistance, can also make listings more appealing.

Fewer Distressed Homes Means Stable Home Values

Sellers may be facing more competition, but home prices are maintaining their stability in the current market. Distressed properties accounted for only 2% of September's transactions. According to Yun, "The inventory of distressed properties is minimal because the mortgage delinquency rate remains very low." Fewer distressed homes helps keep home prices steady, allowing sellers to list for reasonable prices.

Regional Sales Breakdown

Northeast: Existing-home sales annual rate of 460,000; a decrease of 4.2% from August 2024 and 6.1% from September 2023. The median sales price of $467,100 represented a 6% increase from September 2023.

Midwest: Existing-home sales annual rate of 900,000; a decrease of 2.2% from August 2024 and 5.3% from September 2023. The median sales price of $306,600 represented a 5% increase from September 2023.

South: Existing-home sales annual rate of 1.72 million; a decrease of 1.7% from August 2024 and 5.5% from September 2023. The median sales price of $359,700 represented a 0.8% increase from September 2023.

West: Existing-home sales annual rate of 760,000; an increase of 4.1% from August 2024 and 5.6% from September 2023. The median sales price of $616,400 represented a 1.7% increase from September 2023.