U. S. Home Sales Pick Up, But Challenges Remain

In September, the U. S. housing market saw a slight boost in home sales. This uptick happened because mortgage rates dropped a bit, and more homes became available for buyers. The number of homes sold went up by 1. 5% compared to August. This is the fastest pace since February. However, it's important to note that this increase is not a huge surge. It just shows that lower mortgage rates can encourage people to buy homes. The median home price in the U. S. reached $415, 200 in September. This is a 2. 1% increase from the previous year. Home prices have been going up for 27 months in a row. This is the highest median price for any September since records began in 1999. The housing market has been slow since 2022. This is when mortgage rates started to climb from historic lows. Last year, home sales hit their lowest point in nearly 30 years. Mortgage rates began to drop in July. This was before the Federal Reserve cut its main interest rate in September. The Fed did this because they were worried about the job market. Homes that were bought in September likely went under contract in July and August. During this time, the average rate on a 30-year mortgage was between 6. 75% and 6. 56%. Mortgage rates dropped even more in September and October. Last week, the average rate fell to 6. 27%.Even though mortgage rates are lower, many Americans still find it hard to afford a home. Home prices have gone up by 53% in the past six years. This makes it tough for first-time buyers. They usually don't have the money from selling a previous home to put toward a new one. In September, first-time buyers made up 30% of home sales. Historically, they have accounted for 40% of sales. There were 1. 55 million unsold homes at the end of September. This is a 1. 3% increase from August and a 14% increase from September last year. This inventory level matches a five-year high. However, it is still below the roughly 2 million homes for sale that was typical before the pandemic. Homes are taking longer to sell. In September, properties typically stayed on the market for 33 days. This is up from 31 days in August and 28 days in September last year. Despite lower mortgage rates, many buyers are paying in cash. Cash transactions made up 30% of all sales in September. This reflects a broader trend this year. Roughly one-third of homes sold in the first half of 2025 were paid for in all cash. Mortgage rates are expected to ease further through the end of the year. However, prospective homebuyers are likely to remain cautious. This is due to uncertain economic conditions. Home sales activity is likely to remain steady through the fourth quarter. Total 2025 transactions are expected to end only slightly above last year.