Existing-home sales reach their highest pace of the year

The trade organization on Tuesday reported total existing-home sales climbed to a seasonally adjusted annualized rate of 5.17 million in September from the 5.05 million annual rate in August. Observers had predicted a 5.1 million annual rate for September, according to a survey by Bloomberg News.

Lawrence Yun, the association’s chief economist, said investor activity remained “on par with last month’s marked decline.” As Fortune reported last month, investors willing to pay cash for a home have been less active in the market, creating an opportunity for buyers who rely on financing to purchase a home. All-cash sales were 24% of transactions last month, up slightly from 23% in August but far below the 33% reported in September of last year.

“Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter,” Yun said.

Total housing inventory at the end of the month declined 1.3% to 2.3 million existing homes available for sale. The median existing-home price for all housing types totaled $209,700 in September, rising 5.6% from a year ago.

The housing sector’s recovery has been limited by tight lending standards. That has been especially problematic for potential homebuyers from the Millennial generation, which has faced comparatively poorer economic prospects than the broader population. While Millennials are finally moving out of their parents’ homes, they are moving in with friends and relatives, not buying their own house.

“First-time homebuyers are really the missing piece in this housing recovery,” said Gleb Nechayev, senior managing economist at CBRE Econometric Advisors. “They need to step into the market for us to see a [significant] increase in sales. And that hasn’t happened yet.”