US home sales rose in September, but slowed from a year earlier as
mortgage rates, prices rose
[October 14, 2026] By
ALEX VEIGA
Sales of previously occupied U.S. homes rose in September from the
previous month, but slowed compared to a year ago, the latest sign the
housing market remains stalled as rising mortgage rates and home prices
discourage prospective homebuyers.
Existing home sales rose 1.5% last month from August to a seasonally
adjusted annual rate of 3.99 million units, the National Association of
Realtors said Tuesday. One of the factors in the monthly increase is
that sales in August were revised lower.
Sales fell 2.2% compared with September last year. The latest sales
tally is slightly above the 3.98 million pace economists were expecting,
according to FactSet.
Home sales have been mostly hovering close to a 4-million annual pace
going back to 2023, far short of the historic norm that is closer to
5.2-million. September is the second month in a row that the annual
sales pace has remained below 4 million.
Home prices continued to rise nationally last month. The U.S. median
sales price increased 1.3% in September from a year earlier to $417,500,
an all-time high for the month of September based on data going back to
1999, NAR said. Home prices have risen on an annual basis for 39 months
in a row.
“This is a very tough market out there, especially with mortgage rates
rising,” said Lawrence Yun, NAR’s chief economist.
The U.S. housing market has been in a slump since 2022, when mortgage
rates began to climb from pandemic-era lows. Sales of previously
occupied U.S. homes were essentially flat last year, stuck at a 30-year
low.
This year, sales have been in a rut in large part due to rising
borrowing costs, as mortgage rates have marched higher in the months
since the war between the U.S. and Iran started in late February.
Expectations of higher inflation amid surging oil prices have pushed up
the long-term bond yields that lenders use as a guide to pricing home
loans, driving mortgage rates higher.
The average rate on the benchmark 30-year mortgage hit 7.4% last week,
its highest level in nearly three years. It briefly dipped below 6%
before the war started.
Many of the homes purchased last month likely went under contract in
August and July, when the average rate on a 30-year mortgage ranged from
6.43% to 6.69%, according to Freddie Mac.
[to top of second column] |
 Mortgage rates are not likely to
drop meaningfully any time soon, given the ongoing uncertainty over
oil prices, geopolitical tensions, the exploding U.S. government
debt and other factors that have been driving rates on home loans
higher, Yun said.
Homebuyers should consider mortgage rates at 7%, or slightly above
7%, “the new normal,” he said.
The sharp rise in mortgage rates, which can add hundreds of dollars
a month in costs for borrowers, has led many would-be home shoppers
to put their home shopping plans on hold.
However, those who can afford to buy at current rates, or pay all
cash, have a much wider selection of homes to choose from than
they've had in years as properties sit on the market longer.
Although home inventory levels remain below historical norms, there
were 1.6 million unsold homes at the end of last month — the highest
level of unsold inventory on the market since November 2019, NAR
said.
All told, unsold home inventory rose 1.9% last month from August and
climbed 4.6% from September last year, NAR said.
September’s month-end inventory translates to a 4.8-months’ supply
at the current sales pace. Traditionally, a 4- to 6-month supply is
considered a balanced market between buyers and sellers.
The more balanced market gives home shoppers potentially more
leverage in negotiating better terms with sellers, especially if a
property has not fetched offers in weeks or months.
Consider, in September, the national median home listing price fell
1.2% from a year earlier to $419,250 as about 21% of listings had
their initial price lowered, according to Realtor.com.
“The market is clearly tilting in favor of buyers able to negotiate
for better prices,” Yun said.
All contents © copyright 2026 Associated Press. All rights reserved
 |
