Existing-home sales increased in September, but weakening expectations for buyer traffic suggest originators should be cautious about reading the gain as a purchase-market recovery.
Sales rose 1.5% from August to a seasonally adjusted annual rate of 3.99 million, according to the National Association of Realtors’ Oct. 13 report. Transactions remained 2.2% below a year earlier, with annual declines in all four regions.
The more immediate warning for purchase pipelines came from NAR’s accompanying Realtors Confidence Index: Just 8% of respondents expect buyer traffic to increase from a year earlier over the next three months, down from 13% last month and 20% a year ago. NAR said rising rates have pushed agent sentiment to its weakest level since fall 2023, when rates approached 8%.
Together, the reports show the limits of September’s improvement: More homes are available, but financing them remains a hurdle.
“Despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year,” said NAR Chief Economist Lawrence Yun. “Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home.”
Ali Wolf, chief economist at NewHomeSource and Zonda, said the increase reflected the market working through available inventory rather than a fresh influx of buyers.
“Even though existing home sales rose, don’t think of this as a recovery,” Wolf said. “Supply is still pulling most of the weight here, and today’s report shows a market clearing accumulated listings, not a wave of buyers coming in.”
Wolf described September as the last clean reading before rates climbed above 7%, saying next month’s report would begin showing the impact on buyer activity.
NMP previously reported that new-home sales rose 6.4% in August while builders cut prices and offered incentives. Those concessions could become more valuable to buyers facing higher borrowing costs.
The average 30-year fixed rate climbed to 6.86% in September from 6.67% in August and 6.35% a year earlier, according to Freddie Mac figures cited by NAR.
More Choice, Still-Stretched Budgets
Unsold inventory increased 1.9% from August to 1.60 million homes, up 4.6% from a year earlier. That represented 4.8 months of supply, unchanged from August but above last September’s 4.5 months.
The increase follows August’s inventory expansion, which failed to revive purchase activity.
Properties typically spent 33 days on the market, up from 31 in August and unchanged from a year earlier.
“Higher inventory and lengthening days on market give buyers improved negotiating power,” Yun said. “Home sellers need to be realistic about local market conditions, which could require price discounts and other incentives to attract buyers.”
That gives loan officers and their agent partners an opening to discuss seller-paid closing costs or rate buydowns with borrowers whose budgets are stretched. The additional negotiating room, however, comes alongside continued price increases.
The median existing-home price reached $417,500, up 1.3% from September 2025, marking the 39th consecutive month of annual gains. NAR’s Housing Affordability Index fell to 105.4 from 106.7 a year earlier, with affordability deteriorating in three of the four regions.
National inventory gains also do not mean every borrower faces an easy negotiation. Sixteen percent of homes sold above list price, unchanged from August, though down from 21% a year earlier.
Builders Compete For Payment-Sensitive Buyers
Wolf expects new construction to continue offering buyers lower-priced options and incentives through the end of the year as builders work toward their sales goals.
“This is a trend we’ll continue to see in the new home market through the end of the year, as builders work to meet their year-end goals,” she said.
Her outlook adds a competitive consideration for originators working with resale buyers: A builder’s financing incentives may influence the borrower’s choice alongside the home’s price. Comparing closing costs, cash needed upfront, and the payment after any temporary buydown expires can help borrowers assess the full offer.
September’s resale gains were concentrated in the South and West, where sales increased 2.8% from August. Midwest sales were unchanged, while Northeast sales fell 2.1%.
First-time buyers accounted for 31% of transactions, up from 30% in August and a year earlier. Individual investors or second-home buyers represented 20%, up from 15% in both comparison periods. Cash purchases accounted for 27% of sales.
Closing reliability bears watching, too. NAR’s confidence survey found that 16% of contracts experienced delayed settlement, up from 14% last month and a year earlier. Typical contracts still closed in 30 days, unchanged from both periods.
For purchase-focused originators, September brought a modest increase in completed transactions. The outlook for the next round of borrowers was considerably less encouraging.
