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U.S. home sales picked up pace in October, reaching their fastest level since February as falling mortgage rates lured more buyers into the market, according to data released Thursday by the National Association of Realtors.
Existing home sales rose 1.2% from September to a seasonally adjusted annual rate of 4.10 million units, slightly exceeding economists’ expectations of 4.09 million. Compared to October last year, sales were up 1.7%, offering a modest bright spot in a housing market that has struggled to regain momentum since its pandemic-era boom.
The October federal government shutdown likely prevented even stronger sales figures, as some transactions that would have closed last month faced delays in processing.
Despite the uptick in activity, the housing market continues to grapple with record-high prices. The national median sales price hit $415,200 in October, rising 2.1% from a year earlier and setting an all-time high for any October in records dating back to 1999. Home prices have now risen on an annual basis for 28 consecutive months.
“We’re seeing buyers respond to the recent drop in mortgage rates, but affordability remains a significant hurdle for many,” said Lawrence Yun, NAR’s chief economist. In his 2026 forecast, Yun predicts a 14% increase in home sales, though he acknowledged that even this projected growth would fall short of returning the market to historical norms.
“I don’t think we will get there next year,” Yun noted. “We need 1 million more home sales to get us back to normal. I’m only looking at an additional half-million home sales next year.”
The U.S. housing market has remained sluggish since 2022, when mortgage rates began climbing from historic lows. Last year, sales of previously owned homes sank to their lowest level in nearly three decades. Through the first 10 months of 2025, sales have remained essentially flat compared to the same period last year, even with the boost from declining mortgage rates this fall.
Historically, existing home sales have typically hovered around 5.2 million annually, well above the roughly 4-million pace that has persisted since 2023. Bridging this gap would require a substantial increase in housing inventory and more significant declines in mortgage rates.
First-time homebuyers continue to face particularly steep challenges, accounting for just 34% of October sales, well below their historical share of 40%. An annual NAR survey revealed that first-time buyers represented an all-time low of 21% of purchases between July 2024 and June 2025, with the average age of first-time buyers reaching a record high of 40.
The Trump administration recently floated the idea of supporting 50-year mortgages to address affordability concerns, though the proposal has drawn criticism from many economists and policymakers who question its effectiveness and potential long-term consequences for borrowers.
Homes purchased in October likely went under contract in August and September when the average 30-year mortgage rate ranged between 6.26% and 6.63%. The decline in rates accelerated in October, reaching 6.17% at one point—the lowest level in over a year—though rates have ticked upward in the past three weeks.
Inventory conditions show modest improvement compared to last year. There were 1.52 million unsold homes on the market at the end of October, down 0.7% from September but up 10.9% from a year earlier. However, this remains well below the approximately 2 million homes typically available before the pandemic.
“To the degree pre-Covid conditions were more normal, we are still tight on inventory,” Yun said.
The current inventory represents a 4.4-month supply at the present sales pace, still short of the 5-6 month supply traditionally considered a balanced market. Properties are taking longer to sell, however, typically remaining on the market for 34 days before selling—a trend that may eventually give buyers more negotiating leverage.
As the market adjusts to shifting economic conditions, both buyers and sellers are recalibrating their expectations, with affordability and inventory constraints likely to remain key factors shaping housing market dynamics in the months ahead.
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6 Comments
Interesting to see home sales picking up despite high prices. The falling mortgage rates seem to be luring more buyers into the market, though affordability remains a concern. I wonder how long this upward trend can continue.
The October sales figures are a bit of a mixed bag – modest growth, but still a struggle to regain the pandemic-era boom. The record-high home prices are a real obstacle for many prospective buyers.
It’s interesting to see the contrast between the slight sales uptick and the record-high home prices. The housing market seems to be in a precarious balancing act right now.
It’s good to see some signs of life in the housing market, but the high prices and affordability challenges are a real drag. The government shutdown likely didn’t help either. I’m curious to see how the market evolves in the coming months.
Absolutely, the affordability issue is a real concern. Even with falling mortgage rates, those sky-high prices make it tough for many potential homebuyers.
The year-over-year sales increase is a positive, but the housing market is still in a fragile state. I’m curious to see how factors like inventory levels and economic conditions play out in the months ahead.