SKN | US Existing Home Sales Rise as Record September Prices and Higher Mortgage Rates Limit Affordability

Existing home sales in the United States increased by 1.5% in September 2026, but the improvement offers limited evidence of a sustained housing recovery. Rising mortgage rates continue to constrain purchasing power, while the median existing-home price reached $417,500, the highest September reading on record. At the same time, inventory climbed to 1.60 million homes, its highest level since late 2019, highlighting the growing disconnect between available supply and what households can afford.

Data released by the National Association of Realtors on October 13 showed that the sales increase came after August’s sales pace was revised downward. The combination of a modest monthly rebound, elevated prices and expanding inventory suggests that transaction activity remains sensitive to financing costs rather than being driven by a broad improvement in buyer demand.

The Public Assumption

Higher inventory is often interpreted as an early sign that housing affordability is improving because buyers have more properties to choose from. However, supply alone does not determine affordability. If mortgage rates remain elevated and sellers continue to command historically high prices, additional listings may expand choice without making ownership financially accessible to a larger share of households.

The September figures illustrate this distinction. Sales increased, but the record median price for the month suggests that the market has not yet experienced the broad price adjustment that would substantially ease the entry barrier for first-time buyers. The downward revision to August also cautions against treating one month of stronger sales as evidence of a durable change in market direction.

The Economic Breakdown

The median existing-home price rose 1.3% from a year earlier to $417,500. Although the annual increase was relatively modest, the absolute price remains significant when combined with borrowing costs above recent historical norms. Higher mortgage rates increase the monthly principal and interest payment on a given loan, reducing the amount a household can finance within a fixed budget.

This creates a difficult adjustment process. Sellers may be reluctant to reduce asking prices, particularly if they have accumulated substantial equity, while buyers must evaluate a purchase against current financing costs rather than prices from previous years. As a result, the market can experience low transaction activity even when the number of available homes rises.

The 1.60 million homes available for sale represent a meaningful increase in supply relative to the pandemic-era market. However, inventory figures alone do not establish whether homes are affordable, appropriately priced or located where demand is strongest. The source data also do not provide a national insurance-cost or income-to-housing-cost ratio for September, so the precise contribution of those expenses to the affordability gap cannot be quantified from this release alone.

Market Segmentation

National figures also conceal differences between regions and property types. Higher-priced coastal markets can expose buyers to larger mortgage balances, property taxes and insurance premiums, while lower-priced inland markets may offer lower entry costs but remain constrained by local wages and employment conditions. Single-family homes and condominiums also carry different ownership expenses, with condominium buyers potentially facing association fees and assessments in addition to mortgage payments.

The Hidden Picture

The cost of ownership extends beyond the purchase price. Homeowners must account for insurance, property taxes, maintenance and, where applicable, homeowners association fees. In markets exposed to severe weather, insurance costs can materially alter the relationship between a property’s asking price and its total monthly expense. For condominium owners, building maintenance and structural-reserve obligations can add further costs that are not reflected in the median home price.

The central question is whether rising inventory will eventually force prices and seller expectations to adjust, or whether mortgage costs and additional ownership expenses will continue to prevent available homes from translating into meaningful gains in housing affordability?