Unsold inventory climbed to 1.60 million homes while the median price posted a 39th straight year-over-year gain. Sales ticked up 1.5% to a 3.99 million pace, a reading that predates the jump in mortgage rates to about 7.4%.
The housing market added sellers in September faster than it added buyers. Prices have not yet adjusted.
Sales of previously owned homes rose 1.5% from August to a seasonally adjusted annual rate of 3.99 million, the National Association of Realtors said Tuesday. That was 2.2% below a year earlier. Unsold inventory climbed 1.9% to 1.60 million homes, up 4.6% from September 2025 and the most since November 2019, Mr. Yun said.
The median sale price rose 1.3% from a year earlier to $417,500, the 39th straight year-over-year increase.
"Despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year," said Lawrence Yun, the group's chief economist. "Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home."
The rate behind the numbers
A deal that closes in September is usually agreed six to eight weeks earlier, when 30-year loans cost about 6.6% to 6.7%. Borrowing costs have since jumped to about 7.4%, following the 10-year Treasury yield, which touched a 24-year high last week. That means the jump in borrowing costs has largely not yet shown up in the sales data.
Days on market and supply
Several measures moved in buyers' favor. Homes spent a median 33 days on the market, up from 31 in August. Supply held at 4.8 months, unchanged from August and up from 4.5 months a year earlier. Cash purchases fell to 27% of sales from 30% a year ago, while first-time buyers rose to 31%.
"Higher inventory and lengthening days on market give buyers improved negotiating power," Mr. Yun said. He said sellers may need "price discounts and other incentives to attract buyers."
The West shows where that is already happening. Sales there rose 2.8% from August, but the region's median price of $613,600 was 0.3% lower than a year earlier.
Market implications
One reading is that the market is approaching a turn in prices. Inventory is growing at a mid-single-digit pace, homes are taking longer to sell, the West has already posted a year-over-year price decline, and higher rates have yet to fully reach closings.
A second reading is that the market is frozen rather than correcting. National prices are still up for a 39th straight month, sales are near the year's lows, and owners who locked in cheaper mortgages have little reason to cut prices.
Homebuilder shares were steady. The iShares U.S. Home Construction ETF rose about 0.8% in afternoon trading, holding above its 52-week low.
What to watch
Pending-home sales, which track contracts signed after rates jumped, will show whether demand has fallen further. Weekly mortgage-rate surveys and Wednesday's inflation data will shape the path of the 10-year yield that sets those rates.