Home Sales Tick Up 1.5% in September as Buyers Gain Negotiating Power: What It Means if You're Buying or Selling

Prices are still edging higher, but more homes on the market and longer selling times are tilting the balance a little toward buyers.

Sales of previously owned homes rose slightly in September, but the housing market remains slow as higher mortgage rates keep many would-be buyers on the sidelines, the National Association of Realtors (NAR) said on Tuesday, Oct. 13.

Existing-home sales, which count homes that were lived in before rather than newly built, rose 1.5% from August to a seasonally adjusted annual rate of 3.99 million. That's 2.2% lower than a year earlier. "August and September marked the two slowest months for home sales this year," said Lawrence Yun, NAR's chief economist.

For buyers, though, the report had a silver lining: more choices, and more time to make decisions.

Prices are still rising, but slowly

The median price of an existing home, the midpoint where half of homes sold for more and half for less, was $417,500 in September. That's up 1.3% from $412,300 a year earlier and marks the 39th month in a row of year-over-year price gains, according to NAR.

Price gains varied a lot by region. In the Northeast, the median price rose 4.7% from a year earlier to $523,600, and in the Midwest it rose 3.1% to $329,600. In the South, prices were nearly flat, up 0.2% to $361,000. In the West, the median slipped 0.3% to $613,600.

Even modest price gains add up when mortgage rates are high. NAR's housing affordability index, which compares typical family income with the cost of buying a median-priced home, fell to 105.4 from 106.7 a year earlier, meaning homes became slightly less affordable.

More homes for sale, and they're sitting longer

The number of homes for sale climbed to 1.60 million at the end of September, up 1.9% from August and 4.6% from a year earlier. That works out to a 4.8-month supply at the current sales pace, up from 4.5 months a year ago. More supply generally means less competition among buyers.

Homes are also taking a little longer to sell. The typical home stayed on the market for 33 days in September, up from 31 days in August.

"Higher inventory and lengthening days on market give buyers improved negotiating power," Yun said. He added that "home sellers need to be realistic about local market conditions."

Who's buying

First-time buyers made up 31% of sales, up from 30% in August and a year earlier. All-cash purchases accounted for 27% of sales, down from 30% a year ago. Individual investors and second-home buyers jumped to 20% of sales from 15% in August. Distressed sales, such as foreclosures and short sales, stayed at a low 2%.

Mortgage rates remain the biggest hurdle. The average 30-year fixed mortgage rate was 6.86% in September, according to Freddie Mac data cited by NAR, up from 6.67% in August and 6.35% a year earlier. "Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home," Yun said.

What this means for your wallet

If you're buying, this kind of market can work in your favor if you're financially ready. With more listings and homes sitting longer, you may have room to ask for a lower price, help with closing costs, or repairs after an inspection. It's worth asking your agent how long a home has been listed and whether the price has already been cut.

Before you shop, consider getting preapproved for a mortgage, which means a lender has reviewed your finances and told you how much it's willing to lend. Comparing loan offers from at least a few lenders can make a real difference: on a $350,000 loan, even a small difference in rate can change your monthly payment and add up to thousands of dollars in interest over 30 years. Make sure the full monthly cost fits your budget, not just the loan payment but also property taxes, homeowners insurance and any HOA fees.

If you're selling, pricing realistically from the start matters more now. Homes that are priced too high may sit longer and end up needing price cuts anyway. Small fixes, a clean presentation and flexibility on closing dates can help your home stand out.

If you're waiting, use the time to build your down payment and emergency fund and to improve your credit score, which can help you qualify for a lower rate when you're ready. Keep an eye on mortgage rates: the government's September inflation report on Oct. 14 could influence where rates head next.

This article is for education only and is not financial advice. Everyone's situation is different.