If you've been watching for a sign that the housing market is loosening up, the September numbers look encouraging at first glance. Existing home sales rose 1.5 percent from August to a seasonally adjusted annual rate of 3.99 million, according to the National Association of Realtors. That's the kind of headline that makes buyers wonder whether now is finally the moment to make a move. But the report is backward looking, and the mortgage rate environment has already shifted since the data was collected.
Start with what the September numbers actually show. Sales were still down 2.2 percent from a year earlier, even with the monthly gain, because last year's comparison period had somewhat lower mortgage rates and stronger demand heading into the winter. NAR Chief Economist Lawrence Yun put it plainly: "Despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year." That framing matters if you're trying to read the market correctly. A monthly increase off a weak base is not the same thing as a market picking up steam.
The inventory side of the report is where buyers may find something more useful. Total housing inventory rose 1.9 percent from August to 1.60 million units, which is 4.6 percent above where it stood a year earlier. That works out to a 4.8 month supply of homes at the current sales pace, unchanged from August but above the 4.5 month supply recorded a year ago. More supply relative to demand generally means more room to negotiate, longer time on market for sellers, and fewer bidding wars for buyers who have been priced out of competitive situations over the past few years.
Yun connected the inventory build directly to buyer leverage, saying rising inventory and longer marketing times are giving buyers more negotiating power. He added that sellers need to be realistic about local market conditions, which could require price discounts and other incentives to attract buyers. If you're shopping right now, that's a useful data point to bring into a conversation with your agent about how aggressively to negotiate on price, repairs, or closing costs.
Here's where the timing gets more complicated. The September sales and inventory figures reflect contracts and closings that were largely locked in before the most recent run-up in mortgage rates. According to HousingWire's weekly Housing Market Tracker, mortgage rates were running around 7.48 percent in the second week of October, with the 10-year Treasury yield holding near 5.35 percent and mortgage spreads widening to 2.12 percent. Rates in that range sit well above the roughly 6.64 percent threshold that HousingWire lead analyst Logan Mohtashami has repeatedly flagged as the point where purchase demand tends to slow. That's the gap between what the September report shows and what's actually happening in the market as you read this.
The real time data backs that up. National active inventory data tracked by HousingWire showed new pending sales falling to 54,060 for the week ending October 9, down 15.4 percent from 63,883 during the same week a year earlier. At the same time, 42.89 percent of active listings had experienced a price reduction, compared with 41.84 percent a year earlier. Put together, that's a market where homes are sitting longer, more sellers are cutting prices, and fewer buyers are signing contracts, even as the total number of homes for sale is still relatively limited by historical standards.
What does that combination mean if you're actually house hunting this month rather than reading about national averages? It means the September NAR report and the October ground conditions are telling two different but related stories. The report confirms that inventory has been building for months and that sellers in many markets are adjusting their expectations. The more current weekly data shows that higher rates are keeping some buyers on the sidelines right now, which is part of why price reductions are becoming more common even as total listings tighten slightly week to week. Those two trends together can work in your favor if you're financially ready to move, because a seller who has already had a price cut and a longer than expected time on market is generally more open to negotiation than one who just listed.
Regional conditions vary enough that the national figures only tell part of the story. Existing home sales increased monthly in the South and West, held steady in the Midwest, and declined in the Northeast, while every region was still down year over year. Median prices moved differently by region too. The Northeast saw a 4.7 percent annual increase to $523,600, the Midwest rose 3.1 percent to $329,600, the South edged up 0.2 percent to $361,000, and the West was the only region to post a decline, down 0.3 percent to $613,600. If you're house hunting, ask your agent how your specific metro compares to these regional patterns rather than assuming the national trend applies directly to your search.
For buyers weighing timing, the practical takeaway is to separate the data you're reading from the data that applies to the specific listing in front of you. A national or even metro level statistic about September sales or October rates won't tell you whether a specific seller is motivated, how long a specific listing has sat, or how much room there is to negotiate on a specific house. Ask your agent for the actual days on market figure and price history for any property you're seriously considering before you decide what to offer.
The median existing home price nationally was $417,500 in September, up 1.3 percent from a year earlier, which NAR noted was the 39th consecutive month of annual price gains. That streak is notable context, but it also sits alongside the price reduction data showing nearly 43 percent of active listings have already seen a cut. Those two facts are not contradictory. National median prices can keep rising year over year because of a shift in the mix of homes selling, even as individual sellers in a slower market cut their original asking prices to attract offers. If you're comparing a listing's current price to what similar homes sold for last year, make sure you're also asking how that listing's price has moved since it first went on the market.
Taken together, the September report and the October tracking data point to a market that is still working through an inventory rebuild after several years of tight supply, with mortgage rates now acting as the main brake on how quickly demand responds to that extra supply. If you're house hunting this fall, the opportunity is less about timing a rate move and more about using the current combination of rising inventory, slower pending sales, and more frequent price cuts to negotiate a better deal on a home that actually fits what you need.
