U.S. Home Sales Fall 2.2% as Rates and Prices Rise

Summary

Existing home sales in the U.S. rose 1.5% in September to a seasonally adjusted annual rate of 3.99 million, according to the National Association of Realtors. Sales fell 2.2% compared to September 2025. The median home price hit a record $417,500, up 1.3% from a year earlier. Mortgage rates have climbed to 7.4%, the highest in nearly three years, contributing to a stalled housing market. Inventory levels remain high, with 1.6 million unsold homes at the end of September.

Our Reading

The numbers tell one story.

Home sales inched up but lagged year-over-year. Prices keep rising despite weak demand. Mortgage rates hit a three-year high. Inventory is up, but not enough to balance the market. The housing market is stuck in a holding pattern.

There’s a lot of noise about demand, but the real story is how much the market has changed.

Author: Evan Null

Home Sales Edge Higher, But Not Enough

Existing home sales in the U.S. rose 1.5% in September, reaching a seasonally adjusted annual rate of 3.99 million, according to the National Association of Realtors. The increase came after August’s sales were revised lower. Despite the monthly gain, sales fell 2.2% compared to September 2025, showing continued weakness in the housing market.

The median home price hit a record $417,500 in September, up 1.3% from a year earlier. This marks the 39th consecutive month of annual price growth, highlighting the ongoing pressure on buyers. The average 30-year mortgage rate reached 7.4% last week, the highest in nearly three years, further deterring potential homebuyers.

Home sales have remained near a 4-million annual pace since 2023, far below the historical norm of 5.2 million. September was the second consecutive month that the sales pace stayed below 4 million, signaling a persistent slowdown. The housing market has been in a slump since 2022, with sales essentially flat last year.

Inventory levels have risen, with 1.6 million unsold homes at the end of September, the highest since November 2019. However, the market remains unbalanced, with a 4.8-month supply of homes at the current sales pace. This suggests that while there are more homes on the market, demand is still not strong enough to move them quickly.

Lawrence Yun, NAR’s chief economist, described the market as “very tough,” especially with rising mortgage rates. The combination of high prices, high rates, and limited inventory continues to challenge both buyers and sellers.

Mortgage Rates and Prices Keep Buyers at Bay

The U.S. housing market continues to struggle with high mortgage rates and rising home prices. The average 30-year mortgage rate hit 7.4% last week, its highest level in nearly three years. This has made home buying more expensive, leading many potential buyers to delay their purchases.

Despite the rise in mortgage rates, home prices have continued to climb. The median sales price reached $417,500 in September, an all-time high for the month. This is the 39th consecutive month of annual price growth, indicating that the market is still under pressure from supply and demand imbalances.

Home sales have remained stagnant, with the annual pace hovering around 4 million since 2023. This is far below the historical average of 5.2 million, showing that the market is still far from normal. The current pace of sales is not enough to absorb the existing inventory of homes on the market.

Inventory levels have increased, with 1.6 million unsold homes at the end of September. This is the highest level since November 2019, but it still falls short of what is considered a balanced market. A 4- to 6-month supply is typically seen as balanced, but the current supply is at 4.8 months.

Lawrence Yun, NAR’s chief economist, called the market “very tough,” highlighting the challenges buyers face. With rates and prices still high, the housing market is unlikely to see a quick recovery.

Inventory Levels Rise, But Not Enough to Help Buyers

Home inventory levels have increased in recent months, with 1.6 million unsold homes at the end of September. This is the highest level since November 2019, according to the National Association of Realtors. However, the increase in inventory has not been enough to ease the pressure on buyers.

The current inventory level translates to a 4.8-month supply at the current sales pace. A 4- to 6-month supply is considered balanced, but the market is still skewed toward sellers. Despite the increase in inventory, demand remains weak, and many buyers are still hesitant to enter the market.

Home sales have been flat for much of 2026, with the annual pace remaining near 4 million. This is far below the historical average of 5.2 million, indicating that the market is still in a downturn. The lack of demand has led to longer time on the market for many homes, but it has also given buyers more options.

While the increase in inventory is a positive sign, it has not translated into a significant increase in sales. Buyers are still facing high prices and high mortgage rates, which continue to deter them from purchasing homes. The market remains in a holding pattern, with little sign of a quick recovery.

Lawrence Yun, NAR’s chief economist, described the market as “very tough,” emphasizing the challenges buyers face. The combination of high prices, high rates, and limited inventory continues to make home buying difficult for many Americans.

The Housing Market Stalls as Rates and Prices Rise

The U.S. housing market remains stalled as mortgage rates and home prices continue to rise. Existing home sales in September rose 1.5% from August, but fell 2.2% compared to September 2025. This shows that the market is still struggling to gain momentum despite the slight monthly increase.

The median home price reached $417,500 in September, up 1.3% from a year earlier. This is the 39th consecutive month of annual price growth, indicating that home prices are still rising despite weak demand. The average 30-year mortgage rate hit 7.4% last week, the highest in nearly three years, further discouraging potential buyers.

Home sales have remained near a 4-million annual pace since 2023, far below the historical norm of 5.2 million. This indicates that the market is still in a downturn, with limited activity and high prices keeping buyers at bay. The current pace of sales is not enough to absorb the existing inventory of homes on the market.

Lawrence Yun, NAR’s chief economist, described the market as “very tough,” highlighting the challenges buyers face. With rates and prices still high, the housing market is unlikely to see a quick recovery.

Market Stagnation Continues as Buyers Wait for Rates to Drop

The U.S. housing market remains in a state of stagnation, with sales and prices moving in opposite directions. Existing home sales rose slightly in September, but still fell year-over-year. The median home price hit a record high, while mortgage rates climbed to their highest level in nearly three years.

Despite the slight increase in sales, the market is still struggling to gain traction. The annual sales pace has remained near 4 million since 2023, far below the historical average of 5.2 million. This indicates that the market is still in a downturn, with limited activity and high prices keeping buyers at bay.

The average 30-year mortgage rate reached 7.4% last week, the highest in nearly three years. This has made home buying more expensive, leading many potential buyers to delay their purchases. The combination of high prices and high rates continues to deter buyers from entering the market.

Lawrence Yun, NAR’s chief economist, described the market as “very tough,” emphasizing the challenges buyers face. With rates and prices still high, the housing market is unlikely to see a quick recovery.