An improvement in mortgage rates at the end of the summer boosted home sales, but the gains may be short-lived.

Sales of previously owned homes rose 1.2 percent in September to 4.1 million units on a seasonally adjusted, annualized basis in October, according to the National Association of Realtors. Sales increased by 1.7% during the year.

This count is based on home closings, so contracts were likely signed in August and September. While the government shutdown that began in October will not affect contract signatures, shutdowns, particularly those requiring flood insurance or government-backed rural home loans, could.

During the signing period, the average 30-year fixed-mortgage rate dipped briefly but then rebounded. The 30-year popular rate started at 6.63 percent in August, fell to 6.13 percent by mid-September, and then returned to 6.37 percent by the end of the month, according to the daily. It now stands at 6.36%.

The inventory of homes for sale has also decreased. After much of this year’s gains, supply stood at 1.52 million units, down 0.7% from September, though still up about 11% from a year ago. At the current sales pace, there is 4.4 months of supply, which is still considered lean.

And that’s why prices are still gaining. The average price of a home sold in October was 5,415,200, up 2.1 percent from October 2024 and the 28th consecutive month of annual gains.

“Homebuyers in today’s market face some benefits from lower mortgage rates and seasonally slower competition,” Daniel Hale, chief economist at Realtor.com, said in a release. “At the same time, it’s a challenge to keep home sales at historically low levels due to a lack of housing affordability.”

Homes are staying on the market longer than last month, an average of 34 days, compared to an average of 34 days last month.

First-time buyers have returned to the market, representing more than 27% of sales from a year ago—but not all regions are equal.

“First-time home buyers are facing higher home prices in the West and Northeast in the West,” said Lawrence Yoon, chief economist at Realtors. “First-time buyers did better in the Midwest because of the affordable housing and abundant supply in the South because there is plenty of inventory.”

Sales growth at the high end of the market is strong. Homes priced over $1 million saw a 16 percent increase in sales compared to a year ago, and are priced between $750,000 and $1 million. Meanwhile, sales of homes between $100,000 and $250,000 increased by just 1 percent, and homes priced under $100,000 saw sales decline by nearly 3%.