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"Unexpected Housing Market Surge Amid Falling Mortgage Rates and Robust Demand"

"Unexpected Housing Market Surge Amid Falling Mortgage Rates and Robust Demand"

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 The US housing industry has seen an unexpected surge in activity over the past 48 hours, defying the usual fall slowdown. Zillow and IndexBox report that buyers have returned to the market as the average 30-year fixed mortgage rate fell to about 6.19 percent, its lowest level in 2025 so far. This drop in rates, combined with a robust stock market, has encouraged more homeowners to list properties, with new listings up 3 percent year-on-year in September and inventory 14 percent higher than a year ago. Despite a small month-to-month dip in listings, this is much better than the typical fall drop, signaling resilience.

Existing home sales rose 1.5 percent month-on-month in September, reaching a seasonally adjusted annual rate of 4.06 million units—the fastest pace since February. Compared to last year, sales are up 4.1 percent. The national median sales price climbed 2.1 percent since September 2024, now at a record $415,200. Inventory at month’s end translated to a 4.6-month supply at the current pace, still slightly below the five- to six-month level seen as balanced.

Market dynamics are shifting. There are now 15 buyer-friendly metros—such as Miami, New Orleans, and Austin—up from just six a year ago. However, seller markets, particularly in Buffalo, Hartford, San Jose, and New York, remain strong due to limited supply and restrictive land use.

Both buyers and sellers are adjusting: buyers are more active thanks to lower rates, but 15 percent of pending sales were canceled by hesitant buyers in recent weeks. Sellers are responding with price cuts and slower dealmaking. Cash purchases remain high, making up 30 percent of deals last month, reflecting the ongoing challenge for first-time buyers who now account for only 30 percent of sales, well below the historic 40 percent norm.

Industry leaders expect the market’s momentum to last into the holiday season as borrowing costs ease and pent-up demand is released. Compared with previous months, the housing industry now shows greater balance between buyers and sellers, improved affordability, and more robust sales activity, though regional disparities and supply challenges endure[1][2][3].

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