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Stronger sales of single-family units across the regions led to a 3.2 percent nationwide increase in existing-home sales last month, said NAFCU Research Assistant Yun Cohen, who analyzed data published by the National Association of Realtors.

Existing-home sales rebounded in September to 5.47 million seasonally adjusted units. Sales were 0.6 percent higher than a year ago.

"The presence of first-time buyers also improved," Cohen said in a NAFCU Macro Data Flash report. "The group represented 34 percent of all buyers in September, the highest level since July 2012." While this signifies strong demand for housing, Cohen added, "first-time buyers help contribute to inventory constraints, since they are not listing a home for sale as move-up buyers do."

Existing-home sales improved from a year ago in two of the four regions. The Midwest increased 2.3 percent from the previous year, followed by the West (+1.6 percent). The South reported a decline of 0.9 percent. Sales were essentially unchanged from 12 months ago in the Northeast.

Based on current sales, there were 4.5 months of supply at the end of September, down from 4.6 months in August. Inventory increased 1.5 percent in September but is still down 6.8 percent from a year ago.

The median existing-home price decreased from $239,900 in August to $234,200 (not seasonally adjusted) in September. This is 5.6 percent higher than the median price one year ago. September marks the 55th consecutive month of year-over-year price increases.

"Despite tight inventory and high prices, the housing market is expected to grow modestly for the rest of year in light of a strong labor market, low mortgage rates and high rental prices," Cohen added.