Housing News

Home Sales Continue to Increase as More Buyers Jump on Lower Mortgage Rates

Existing home sales rose again in September as lower mortgage rates became an incentive for more people to buy a home.

The number of existing home sales increased by 1.5% in September over August’s totals, according to a new report from the National Association of Realtors (NAR). Sales were also up 4.1% from September 2024. (Existing homes exclude new construction.)

The increase shouldn’t come as much of a surprise, as pending home sales, an indicator of future home sales based on signed real estate contracts, were also up in August.

The recent increase in sales is being driven by the decline in interest rates, which fell to their lowest level of the year in the week ending Oct. 23, according to Freddie Mac.

Rates have been coming down since late July. This has driven more people into the market to buy a home and more homeowners are refinancing to take advantage of potential savings.

“As anticipated, falling mortgage rates are lifting home sales,” said NAR Chief Economist Lawrence Yun in a statement. “Improving housing affordability is also contributing to the increase in sales.”

As Yun noted, buying a home is becoming more affordable as interest rates come down, lowering monthly housing payments.

There are also more homes on the market. This is helping to ease some of the sales price concerns.

The total number of homes on the market was up 1.3% in September compared to August and rose 14% from September 2024, per the NAR report.

“[Housing] inventory is matching a five-year high, though it remains below pre-COVID levels,” Yun said. “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales.”

Broken down by region, sales rose year-over-year in the Northeast, Midwest and South, and were flat in the West.

“More inventory and softer price growth—or even price declines in some markets—are giving buyers more options, but affordability is still a challenge” said Bright MLS Chief Economist Lisa Sturtevant in a statement. The multiple listing service covers the mid-Atlantic region.

“Rates will probably come down slightly through the end of the year, but prospective home buyers are still cautious as they face uncertain economic conditions,” Sturtevant added. “Home sales activity is likely to remain steady through the fourth quarter, with total 2025 transactions ending only slightly above last year.”