Favorable mortgage rates outweighed political uncertainty in October, according to the National Association of Realtors’ latest report.
Existing-home sales increased 1.2 percent month over month and 1.7 percent year over year to a seasonally adjusted annual rate of 4.10 million. Total inventory (1.52 million) was down on a monthly basis (-0.7 percent); however, it showed a 10.9 percent improvement from October 2024. The market maintained an average supply of unsold inventory, sitting at 4.4 months at the current sales pace.
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Home prices continued their 28-month growth streak, rising 2.1 percent year over year to $415,200.
Lawrence Yun
“Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” NAR Chief Economist Lawrence Yun said in a prepared statement.
However, there were differences in homebuyers’ experiences throughout the country, with the Midwest and South offering the best opportunities for homeshoppers. Both regions logged home prices well below the national median, at $319,500 and $362,300, respectively.
“First-time homebuyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices,” Yun said. “First-time buyers fared better in the Midwest because of the plentiful supply of affordable houses and in the South because there is sufficient inventory.”
Danielle Hale
Realtor.com Chief Economist Danielle Hale said mortgage rates were responsible for the uptick in sales, as the typical 30-year fixed mortgage rate hovered around 6.3 percent, down from 6.8 percent in the first half of 2025. The shift brought more first-time homebuyers to the fore, with this group accounting for 32 percent of home sales — up from 27 percent a year ago.
“October homebuyers benefited from mortgage rates that trended lower when these homes would have gone under contract in August and September,” she said. “The data suggest that the mortgage rate tailwind was enough to offset the impact of the government shutdown, which was expected to be a drag on home sales.
Although October’s performance offers some much-needed hope for a robust end to 2025, Bright MLS Chief Economist Lisa Sturtevant urged professionals not to get too far over their skis.
“Falling mortgage rates and more inventory have brought some buyers into the market, but affordability and uncertainty continue to be the two big headwinds in the housing market at the end of 2025,” she said in an emailed statement. “We’re likely to see sales end 2025 only slightly higher than a year ago.”
“The big question for 2026 is which will win out — lower rates or economic uncertainty? There is optimism that lower mortgage rates and affordability improvements will lead to an increase in homebuying activity. But we should probably temper expectations for a big surge in sales and listings,” she added. “There is still a lot of economic wariness, leading more consumers to pull back on spending and express concerns about the outlook for their personal financial situations.”
