Home sales were up very slightly in September. Existing home sales continued to decline, dropping by 20,000, but new home sales continued their recent upward march, increasing by 30,000. However, we're still more than a million homes below the pre-pandemic level and probably won't recover until the Fed lowers interest rates to their pre-pandemic level.
Anything can happen, of course, but no one should be holding their breath until interest rates fall to pre-pandemic levels. After keeping the bottom end of their policy range at 0% for years after the financial crisis, the Fed started inching their rate up during the first half of the Trump administration. The bottom end of the range hit 2.25% at the end of 2018. The Fed cut the rate three times in 2019 and got the bottom end of their range down to 1.5%, where it stayed until March 2020 (when it quickly went back to 0%).
Depending on whether you consider 2.25% or 1.5% the "pre-Pandemic" rate, we may not see a Fed Funds rate that low again for decades. The only other time in recent memory the Fed Funds rate has been that low was during the W. jobless recovery. Before that, you have to go back to the early '60s.
The Fed plans (median estimate of the FOMC) for federal funds to go down to 2.9% by the end of 2026. But it will probably cut to near zero in the next financial crash. I don't know when that will happen but it will surely be before decades elapse. Of course that will probably not be a good time for most people to be buying houses.
Financial crashes and resulting recessions are inevitable, at least under the current financial structure and regulatory regime. But that is never taken account of in economic projections.