US existing home sales climbed to their highest pace in eight months in October, offering a rare dose of momentum for a housing market that has spent most of the year stuck near historic lows.
Key Points
Buyers who had high borrowing costs had stepped back in as mortgage rates eased, and in several parts of the country, they gained more leverage to negotiate with sellers. The latest data hint at a market slowly thawing rather than fully rebounding, but they also show how sensitive US existing home sales remain to even modest changes in financing costs.
October Data Show US Existing Home Sales Finally Stirring
Contract closings on previously owned homes rose 1.2% in October to an annual rate of 4.1 million, according to National Association of Realtors (NAR) figures released Thursday. That put US existing home sales slightly above economists’ expectations for a 4.08 million pace.
The pickup marked the fastest increase in eight months and the second straight monthly gain, a notable shift after transactions hovered around 4 million for much of the year — a level NAR considers historically low. The improvement came during a period complicated by a federal government shutdown, underscoring how eager some buyers were to move ahead once conditions improved even slightly.
Prices also continued their steady climb. The median sales price for an existing home reached $415,200, up 2.1% from a year earlier. That extended a streak of year‑over‑year price gains that has been in place since mid‑2023, reflecting ongoing tightness in supply even as demand has cooled from pandemic peaks.
Lower Mortgage Rates Lure Buyers Back to the Market
The key driver behind October’s stronger US existing home sales was a break in borrowing costs. Mortgage rates, which had approached 7% in May, eased into the 6.3% range last month.
NAR Chief Economist Lawrence Yun said buyers moved quickly to lock in those lower rates. “Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” he noted.
The response showed how rate‑sensitive the housing market has become. After months in which high financing costs froze homeowners in place and discouraged would‑be buyers, even a modest decline opened the door for more activity — especially at the higher end of the market.
Sales were strongest among more expensive properties, particularly those priced at $750,000 and above. That pattern suggests wealthier buyers, who often have more flexibility and larger down payments, were quickest to seize the opportunity created by slightly cheaper mortgages.
Yun emphasised that an even larger drop in borrowing costs could have a more dramatic impact. He pointed to a potential mortgage rate in the 5.8% to 5.9% range as a level that might “make a bigger difference” in reviving US existing home sales.
Inventory, Days on Market Shift Balance Toward Buyers
While demand showed signs of life, the supply side of the housing equation also shifted in October. The number of previously owned homes listed for sale edged down 0.7% to 1.52 million. Even with that decline, inventory remained near its highest mark since mid‑2020, according to NAR.
Homes spent longer waiting for buyers. Properties stayed on the market for an average of 34 days, the longest stretch for any October since 2019. For much of the pandemic era, listings often drew multiple offers within days; the latest figure indicates a return to a slower, more deliberate pace.
That combination — relatively elevated inventory and longer listing times — gave buyers more room to negotiate. A separate report from brokerage Redfin estimated that sellers outnumbered buyers nationwide by about 500,000 last month. With that imbalance, purchasers in many areas were able to seek discounts and concessions that would have been difficult to secure during the recent seller‑dominated years.
Even so, Yun cautioned that a full return to pre-COVID conditions is still distant. To get US existing home sales back to those earlier levels, he said, would require a “drastically larger supply” of homes alongside a “much more meaningful decline in mortgage rates” than the market has seen so far.
Regional Picture: Midwest Leads, West Lags
The October data also showed how uneven the recovery in US existing home sales remains across regions.
- In the South, the nation’s largest home‑selling region, sales increased 0.5%. That marked the strongest pace there since February and underscored the region’s continued role as a driver of national housing activity.
- In the Midwest, closings jumped 5.3%, leading all regions. The gain signalled that buyers in the nation’s midsection are responding strongly to lower borrowing costs and slightly better inventory conditions.
- In the Northeast, sales were flat. The lack of movement highlighted ongoing affordability challenges and limited supply that continue to weigh on activity.
- In the West, sales fell 1.3%, bucking the national trend. That region has some of the country’s highest home prices, making it particularly vulnerable to elevated mortgage rates even when those rates come down modestly.
This regional split shows that while national averages suggest a mild improvement, local experiences of the housing market can vary widely depending on price levels, job trends and available inventory.
First-Time Buyers Edge Back In
A small but important shift occurred among first-time buyers, a group that has struggled with rising prices and higher borrowing costs over the past several years.
In October, first-time purchasers accounted for 32% of existing-home closings, up from 30% a month earlier. That increase, while modest, suggested that easing mortgage rates and slightly better negotiating power are helping more newcomers gain a foothold in the market.
For US existing home sales to sustain momentum over time, participation from first-time buyers is critical. They not only absorb entry-level inventory but also allow existing owners to trade up, keeping the market’s “ladder” functioning. The latest uptick will be closely watched to see whether it marks the start of a trend or a one‑month response to temporary rate relief.
What October’s Report Signals for the Housing Outlook
The October data paint a picture of a housing market that is no longer frozen, but still far from fully recovered. US existing home sales are rising from very low levels rather than surging to new highs, and the gains remain heavily dependent on incremental changes in mortgage rates.
On the positive side, buyers now have more leverage than they did during the peak of the pandemic housing boom. Inventory is relatively higher, homes are staying on the market longer, and sellers are more willing to negotiate. These factors, combined with modestly lower borrowing costs, have been enough to nudge more transactions across the finish line.
On the cautionary side, the same forces that weighed on the market earlier this year have not disappeared. Supply remains too limited to restore pre-COVID sales volumes, and mortgage rates are still well above the ultra‑low levels that fueled the last surge. Until both inventory and financing costs move more decisively, US existing home sales are likely to show gradual improvement rather than a rapid rebound.
Market participants will soon get another key data point. The NAR plans to release the October pending home sales on Tuesday, offering an early look at contract activity that will translate into future closings. That report should help clarify whether October’s increase was a one‑off reaction to slightly lower rates or the beginning of a more sustained shift in housing demand.
For now, the message from October is cautious optimism: the market is stirring, buyers are gaining a bit of ground, and US existing home sales are finally moving off the floor — but a full recovery still appears to be some distance away.
FAQ’s
What are US existing home sales and why do they matter?
US existing home sales measure completed transactions of previously owned homes, condos and co‑ops. They’re a key barometer of housing demand, consumer confidence and how higher mortgage rates are affecting the broader economy.
Why did US existing home sales rise in October 2025?
Sales rose 1.2% to a 4.1 million annual rate as mortgage rates eased into the 6.3% range from nearly 7% in May. Lower borrowing costs, plus more negotiating power for buyers, helped unlock demand after months of stagnant activity.
How do mortgage rates influence US existing home sales?
Higher mortgage rates make monthly payments more expensive, sidelining many buyers and freezing move‑up sellers. When rates fall even modestly, affordability improves, and US existing home sales often pick up as more buyers can qualify and feel confident to act.
Are US existing home prices rising or falling right now?
Prices are still rising. The median existing home price climbed 2.1% year over year in October to $415,200, extending a streak of annual gains since mid‑2023, even as sales volumes remain below pre-COVID levels.
