Sales of existing homes in the United States experienced a modest increase in September, rising 1.5 percent from the previous month to a seasonally adjusted annual rate of 3.99 million units, according to data released by the National Association of Realtors (NAR) on Tuesday. However, despite this uptick, the housing market remains subdued amid ongoing challenges, including high mortgage rates and elevated home prices.

The modest rise in sales mostly stems from a downward revision of August figures, which had initially been reported higher. Compared with September of last year, sales were down 2.2 percent, reflecting a broader slowdown in the market. The current pace remains below the historic average of approximately 5.2 million annual home sales, with the market hovering around 4 million units since 2023. Notably, September marked the second consecutive month that sales have stayed under this threshold.

Housing supply has improved, returning to levels observed before the COVID-19 pandemic, which some analysts interpret as a sign of weak demand rather than revitalized market activity. Despite the increased inventory, affordability continues to be a major concern. The median price for existing homes in September reached $417,500, the highest ever recorded for the month since tracking began in 1999, reflecting a 1.3 percent increase compared to the same month last year. This marks the 39th consecutive month of year-over-year price increases.

The housing market slump that began in 2022 has been largely attributed to rising mortgage rates, which have surged after remaining near record lows during the pandemic. The increase in long-term bond yields, influenced by geopolitical tensions such as the conflict between the United States and Iran starting in late February, along with fears of higher inflation exacerbated by rising oil prices, have contributed to higher borrowing costs. These factors have cooled demand, particularly among younger buyers, for whom homeownership has become increasingly unattainable.

Priscilla Thiagamoonthy, a senior economist at BMO Capital Markets, noted that the unexpected rise in home sales could be attributed to delayed closings and improved inventory levels. Nevertheless, the overall market remains constrained by affordability pressures and economic uncertainty, issues that are likely to remain focal points as the country approaches the Nov. 3 midterm elections.