U.S. Existing Home Sales (September 2025)

U.S. existing home sales improve in September, price growth heats up

• Existing home sales rose by 1.5% month-on-month (m/m) to 4.06 million units (annualized) in September – meeting the consensus forecast. While still at a low level relative to historical norms, this was the best showing in seven months. 
• The gain was entirely driven by an improvement in the single-family segment, where sales were up 1.7%. Meanwhile, sales in the smaller condo/co-op segment remained unchanged at a level of 370k for the third month in a row. Regionally, sales were up 5.5% in the West, 2.1% in the Northeast and 1.6% in the South, but fell 2.1% across the Midwest. 
• Total inventory at the end of September was 1.55 million units, up 1.3% from August and 14% from September of last year. Measured at the current sales rate and seasonally adjusting, unsold inventory stood at 4.4 months' supply, up from 4.3 in August and 4.0 in September 2024. 
• The median home price was up 2.1% year-on-year from 2.0% in the month prior. On a seasonally adjusted basis, the median home price increased by 0.8% m/m, building on a gain of 0.7% from the month prior (seasonal adjustment performed by TD Economics). This is a notable contrast from the moderate declines recorded in the first half of the year.

Key Implications

• The improvement in existing home sales in September, while encouraging, does little to change the overarching theme of sales activity remaining well below historical norms. More than anything, it reinforces the notion that, with affordability stretched tight, the market does respond to even mild reductions in mortgage rates. Inventory levels continue to improve at a modest clip, but with the months' supply remaining at the low end of what is considered balanced territory, this appears to be doing little to prevent a reacceleration in home price growth. 
• Mortgage rates have fallen further in recent days, with the 30-year fixed rate currently hovering near 6.2%. Normally, this would encourage more homebuying, but mortgage purchase applications have headed consistently lower in each of the last four weeks ending on October 17th – a clear signal that activity is easing once again. This suggests that other factors – such as the reacceleration in home price growth that bites into affordability, ongoing uncertainty exacerbated by the government shutdown, or the weakness in the labor market – may be muting the growth impulse from an easing in mortgage rates. 

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