Key Takeaways
- Sales of existing homes rose in October to their highest level in eight months, as buyers jumped on better mortgage rates and took advantage of plentiful inventory.
- While the government shutdown impacted some government-backed mortgage loans in flood zones and rural areas, home sellers were able to close deals.
- However, home sales remain near their lowest in more than a decade as increasing costs and persistently high interest rates keep some buyers on the sidelines.
No government, no problem for U.S. home sellers across the in October.
Existing-home sales increased in October to a seasonally adjusted annual rate of 4.1 million, a 1.7% gain from the same month last year. That made October the best month for home resales since February, National Association of Realtors data showed. It’s the fourth-straight month that existing-home sales have posted year-over-year improvement.
Homebuyers were likely motivated by favorable borrowing costs, as mortgage rates averaged 6.25% in October, lower than the 6.43% rates homebuyers faced in October 2024. A steady supply of inventory also helped, with October’s national home supply of 4.4 months coming in ahead of last year’s levels, even though it contracted slightly from September.
Additionally, the government shutdown doesn’t appear to have been a significant obstacle for homebuyers. Experts had warned that purchases might be stalled by issues with mortgage approvals, income verification, federal flood insurance or the rural homebuyer program.
Why This is Important To The Economy
Existing-home sales are a broad indicator of the health of the U.S. economy, as well as a key datapoint for homebuyers and sellers who want to assess how competitive the current real estate market is.
“Existing home sales rose again in October despite the government shutdown and ongoing worries about more layoffs in the economy,” said Heather Long, chief economist at Navy Federal Credit Union. “In addition to lower mortgage rates, potential buyers are also encouraged by the larger supply of homes for sale this year. Buyers have more options, lower rates and not much competition.”
Sales Remain Near Decades-Low Levels
While it may be an improving market for buyers, sales remained near their lowest levels in more than a decade, with high costs continuing to keep many potential home buyers from acting.
“Sales remained subdued as high mortgage rates and a plateau in existing home listings are limiting both the supply and demand sides of the market,” wrote Nationwide economist Daniel Vielhaber. “The existing side of the housing market is expected to continue to struggle in the coming months as poor (but improving) housing affordability should keep many potential buyers on the sidelines into 2026.”
The median house price in October was $415,200, up 2.1% from October 2024 levels, NAR data showed. It’s the 28th straight month that house prices have shown year-over-year increases.
