US existing-home sales rose in September but remained below the level recorded a year earlier, as higher mortgage rates and climbing prices continued to weigh on the housing market.
Sales of previously occupied properties increased by 1.5% from August to a seasonally adjusted annual rate of 3.99 million, the National Association of Realtors (NAR) said. The August figure was revised down, contributing to the monthly rise.
Compared with September last year, however, sales fell by 2.2%. The latest annual rate was marginally above the 3.98 million expected by economists.
Home sales have largely remained near a four million annual pace since 2023, well below the historic norm of about 5.2 million. September marked the second consecutive month in which the pace stayed below four million.
Mortgage rates and prices continue to deter buyers
The national median sales price rose 1.3% year on year to 417,500 dollars (£310,000), reaching a record high for September in data going back to 1999.
Prices have increased annually for 39 consecutive months. Lawrence Yun, the NAR’s chief economist, said: “This is a very tough market out there, especially with mortgage rates rising.”
The average rate on a 30-year mortgage reached 7.4% last week, its highest level in almost three years. It had briefly fallen below 6% before the war between the US and Iran began in late February.
Higher inflation expectations linked to surging oil prices have pushed up long-term bond yields, which lenders use to help price home loans. The resulting increase in mortgage rates has added hundreds of dollars a month to some borrowers’ costs and prompted many prospective buyers to delay their plans.
The US housing market has been in decline since mortgage rates began rising from their pandemic-era lows in 2022. Sales were essentially flat last year, remaining at a 30-year low.
Those able to buy at current rates, or pay in cash, are nevertheless facing a broader choice of properties as homes remain on the market for longer.
There were 1.6 million unsold homes at the end of September, the highest level since November 2019, although inventory remains below historical norms.
Unsold stock rose 1.9% from August and was up 4.6% compared with September last year. The supply represented 4.8 months of homes at the current sales pace, within the four-to-six-month range traditionally considered a balanced market between buyers and sellers.
