Existing home sales rose 1.5% in September to a seasonally adjusted annual rate of 3.99M units, the National Association of Realtors said Tuesday.
The gain is the first since May, after three straight monthly declines. Economists surveyed by The Wall Street Journal had expected a decline of 0.8%.
Part of the bounce is optical. August was revised down from 3.98M to 3.93M, a two-year low, which made September's base easier to beat.
Sales still fell 2.2% from a year earlier, and declined year-over-year in all four regions.
Mortgage rates are back in the way
Buyers moved during a summer plateau in mortgage rates, then rates surged in recent weeks.
The South rose 2.8% to 1.86M and the West rose 2.8% to 0.73M, offsetting a 2.1% drop in the Northeast and a flat Midwest at 0.93M.
NAR's chief economist Lawrence Yun flagged that the two slowest sales months of the year were August and September.
"Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home."
Lawrence Yun, National Association of Realtors
Prices haven't cracked. The median existing-home price rose 1.3% from a year ago to $417.5K, with monthly slippage partly seasonal since the price data isn't adjusted.
Inventory is building, and sellers are feeling it
Unsold inventory climbed 1.9% to 1.6M units, equal to 4.8 months of supply, and was up 4.6% from a year ago. More listings plus longer days on market hand buyers better negotiating power, Yun said, adding that sellers may need discounts or incentives to close deals.
Sales have hovered near a 4M annual pace since 2023, far below the historic norm closer to 5.2M. September marked the second straight month under 4M.
Existing home sales is a lagging series that records closings on contracts signed months earlier, so modest beats against consensus rarely move rates or the dollar for long.
The lock-in effect is still the core problem. Owners sitting on cheap legacy mortgages have little reason to list, which suppresses turnover even when demand exists.
For the Federal Reserve, weak housing data is unlikely to force a response, since policymakers have acknowledged housing as a relatively soft spot in an otherwise healthy economy.
Homebuilders, mortgage lenders, and home-improvement retailers all take their cue from turnover volume, and that volume is still stuck near four-year lows.
The next few prints will show whether the recent rate surge wipes out September's small win.
