Renewed Confidence Spurs Surge in U.S. Home-Seller Activity in September

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Renewed Confidence Spurs Surge in U.S. Home-Seller Activity in September

In a striking reversal of recent trends, U.S. home sellers re-entered the market with renewed confidence in September, fueled by falling mortgage rates. According to Realtor.com’s September housing report, new home listings jumped by 11.6% year-over-year, a significant shift from August’s slight decline of 0.9%. This uptick marks a three-year high in new listings, as mortgage rates reached their lowest point in 24 months.

Realtor.com’s economists had predicted that the sharp drop in mortgage rates in mid-August would likely boost home listings in the following months, and September’s data confirmed this. Ralph McLaughlin, Senior Economist at Realtor.com, commented, “The lock-in effect of high rates appears to be eroding as new listings in September jump on a year-over-year basis.”

Mortgage rates, which are now 1.7 percentage points lower than their 2023 peak, have notably increased buyers' purchasing power. This has encouraged more sellers to list their homes, leading to inventory growth across all U.S. regions. The Northeast saw the biggest surge in new listings, up by 15.6%, followed by the West at 13.4%, the South at 8.3%, and the Midwest at 6.1%.

Luxury Markets See the Largest Gains

Higher-priced markets saw the most significant inventory increases as falling mortgage rates had a larger impact on mortgage payments. Seattle led the pack with buyers saving an average of $504 per month on mortgages compared to a year ago, while buyers in San Jose and Washington, D.C., saved even more—$935 and $440 per month, respectively. In contrast, more affordable markets, such as New Orleans, San Antonio, and Tampa, saw only modest increases in new listings, with smaller mortgage savings of around $200–$300 per month.

Inventory Growth and Median Prices

The data further indicated a 34% rise in homes actively for sale in September compared to the same time last year, marking the 11th consecutive month of annual inventory growth. Despite this influx of inventory, the median home price fell by 1% to $425,000. However, the price per square foot increased by 2.3%, suggesting that smaller, more affordable homes now comprise a larger share of the market.

Homes also spent more time on the market—55 days on average in September, up seven days from last year, making it the slowest September in five years. Additionally, the share of listings with price cuts rose to 18.6%, signaling increased competition among sellers.

Looking ahead, with mortgage rates expected to hover around 6% for the remainder of the year, economists predict continued seller activity and an improved buyer landscape, especially as the investor and second-home markets pick up in the fall.