October brought a modest but meaningful boost to the housing market. Existing-home sales rose 1.2% from September to a 4.1 million annualized pace—marking a shift after several slower months. Inventory tightened slightly but remains above last year’s levels, while prices continued their steady rise, up just over 2% from October 2024. Despite economic uncertainty and the recent government shutdown, easing mortgage rates helped reignite buyer activity.

Inventory Tightens Slightly, but Local Conditions Still Matter

Housing inventory fell 0.7% in October, landing at 1.52 million units, or 4.4 months of supply—leaner than September but still up nearly 11% from October 2024. Market dynamics differ sharply by region, especially for first-time buyers. Lawrence Yun, chief economist for the National Association of Realtors (NAR), noted that “first-time homebuyers are facing challenges in the Northeast due to a lack of supply and in the West due to high home prices,” while “first-time buyers are faring better in the Midwest, thanks to a plentiful supply of affordable homes, and in the South, where inventory remains sufficient.” These differences underscore the importance of understanding hyperlocal trends for buyers and sellers alike when pricing or making an offer.

Prices Continue Their Moderate, Steady Rise

In October, the median existing-home price reached $415,200—up 2.1% year over year and marking the 28th consecutive month of gains. This moderate growth reflects a market finding balance rather than accelerating too quickly. While higher-cost regions remain challenging for buyers, more budget-friendly areas still offer accessible entry points. Sellers continue to benefit from solid equity positions, but today’s buyers are more price-sensitive, making realistic pricing essential.

Lower Mortgage Rates Draw More Buyers Back In

A slight drop in mortgage rates helped bring more buyers back into the market. Yun emphasized that “home sales increased in October despite the government shutdown, as buyers took advantage of lower mortgage rates.” He also noted that easing rent growth could help cool inflation, potentially encouraging the Federal Reserve to continue cutting rates and further improving affordability. Even small declines are helping buyers secure better financing terms and improve monthly payment outlooks.

First-Time Buyers and Investors Maintain Steady Activity

First-time buyers accounted for 32% of October transactions, up from both last month and last year. Investors and second-home buyers made up 16% of sales, while cash purchases remained high at 29%. This mix reflects steady confidence across buyer groups. Improving affordability in several regions is giving first-time buyers more room to compete, while investors remain active where local prices and rental demand present opportunities.

Regional Sales Snapshot

• Northeast: 490,000 existing-home sales (0% MoM, +4.3% YoY) | Median Price: $503,700 (+6.5%)

• Midwest: 990,000 existing-home sales (+5.3% MoM, +2.1% YoY) | Median Price: $319,500 (+4.6%)

• South: 1.86 million existing-home sales (+0.5% MoM, +2.8% YoY) | Median Price: $362,300 (+0.3%)

• West: 760,000 existing-home sales (-1.3% MoM, -2.6% YoY) | Median Price: $628,500 (+0.1%)