U.S. Home Sales Jump to Highest Level in 7 Months
U.S. home sales hit a seven-month high as luxury homes lead the gains, but rising prices make it hard for first-time buyers to enter the market.
Sales of existing homes in the U.S. reached a seven-month peak in September, though rising prices and economic uncertainty continue to limit options for many buyers.
The National Association of Realtors (NAR) reported that resales climbed 1.5% last month to a seasonally adjusted annual rate of 4.06 million units, the strongest level since February 2025. Compared with September 2024, sales were up 4.1%. Gains were concentrated in higher-priced properties, as wealthier households benefited from strong stock market returns.
Regional Overview: Sales rose in the Northeast, South, and West, while the Midwest experienced a decline. September’s numbers largely reflect contracts signed in July and August, when mortgage rates started easing ahead of anticipated Federal Reserve rate cuts.
Mortgage Rates and Refinancing: The average 30-year fixed mortgage rate fell to 6.19%, down from 7.04% in January, according to Freddie Mac. Despite lower rates, many potential buyers are holding off, while existing homeowners are refinancing to take advantage of the reduced rates.
Stephen Stanley, chief U.S. economist at Santander, said, “While mortgage affordability has improved slightly, it remains tight for many buyers, especially in the lower- and middle-income segments.”
High-End Market Performance: Sales of homes priced $1 million and above jumped 20.2% year-over-year, while properties in the $750,000–$1 million range rose 14.4%. Entry-level homes priced $100,000–$250,000 increased just 6.0%, showing that affordability is still a barrier for first-time buyers.
Inventory Levels: Existing home inventory rose 14% from last year to 1.55 million units, though it remains below the pre-pandemic level of 1.8 million. Increased supply gives buyers more choices and potential negotiation leverage. Redfinreported that sellers outnumbered buyers by 36.7%, approaching a near-record gap.
Prices and Market Timing: The median price of existing homes climbed 2.1% to $415,200. At September’s sales pace, it would take 4.6 months to sell the current inventory, up from 4.2 months a year ago. Homes stayed on the market for an average of 33 days, compared to 28 days a year ago.
First-Time Buyers and Cash Sales: First-time buyers represented 30% of sales, up from 26% a year ago, but below the 40% benchmark considered healthy for a balanced market. All-cash purchases held steady at 30%, and distressed sales, including foreclosures, accounted for 2% of transactions.
Economic and Policy Factors: The partial government shutdown has caused delays in closing contracts, particularly in flood-prone areas where the National Flood Insurance Program has suspended services. In addition, import tariffs and broader economic uncertainty continue to influence buyer confidence.
Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said that home sales are likely to stay steady for the rest of 2025 and early 2026, with small gains possible if mortgage rates fall and hiring picks up.
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