Sales of previously owned homes rose 1.5% in September to an annualized rate of 4.06 million units, marking the highest pace in seven months but slightly below forecasts.

Compared with last year, sales were up 4.1%, with the South and Northeast seeing the strongest annual growth.

Monthly gains were led by the West, while the Midwest experienced a slight decline, CNBC has reported.

Falling mortgage rates and improving affordability are boosting sales, while inventory rose 14% from last year to 1.55 million units, still below a balanced six-month supply.