Home Sales Are Picking Up Again

Sales of previously occupied US homes accelerated in September as declining mortgage rates and a pickup in available properties on the market encouraged home shoppers. Existing home sales rose 1.5% last month from August to a seasonally adjusted annual rate of 4.06 million units, the National Association of Realtors said Thursday. That's the fastest sales pace since February, the AP reports. Sales jumped 4.1% compared with September last year. The latest sales figure came in slightly below the roughly 4.07 million pace economists were expecting, according to FactSet.

The national median sales price climbed 2.1% in September from a year earlier to $415,200. That's the 27th consecutive month that home prices have risen on an annual basis. The US housing market has been in a sales slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied US homes sank last year to their lowest level in nearly 30 years. Prices kept rising during the sales slump because of tight supply, with many homeowners with mortgage rates around 3% reluctant to move if it would mean getting a new loan with higher rates, the Wall Street Journal reports.

Mortgage rates started declining in July in the lead-up to the Federal Reserve's decision last month to cut its main interest rate for the first time in a year amid growing concern over the US job market. Homes purchased last month likely went under contract in July and August, when the average rate on a 30-year mortgage ranged from 6.75% to 6.56%, according to Freddie Mac. The decline in mortgage rates accelerated in September and this month, dropping the average rate as low as 6.27% last week. The Journal reports that many buyers still consider the market too expensive, but real-estate agents expect a surge in activity if the rate falls below 6%, as expected.