Sales of previously occupied U.S. homes increased last month to the fastest pace since February as lower mortgage rates helped pull more homebuyers into the market.
Existing home sales rose 1.2% in October
from the previous month to a seasonally adjusted annual rate of 4.10 million units, the National Association of Realtors said Thursday.
Sales climbed 1.7% compared with October last year. The latest sales figure topped the roughly 4.09 million pace economists were expecting, according to FactSet.
The national median sales price increased 2.1% in October from a year earlier to $415,200, an all-time high for any October on data going back to 1999. Home prices have risen on an annual basis for 28 months in a row.
The U.S. housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years.
Sales have remained sluggish this year, but have gotten a boost this fall as the average rate on a 30-year mortgage declined to its lowest level in more than a year.
Even so, affordability and uncertainty over the economy and job market remain significant hurdles for many aspiring homeowners after years of skyrocketing home prices.
That's kept existing U.S. home sales stuck at around a 4-million annual pace going back to 2023. Historically, sales have typically hovered around 5.2 million a year.
To close that gap will take a drastic increase in the number of homes on the market and a more meaningful decline in mortgage rates, said Lawrence Yun, NAR's chief economist, whose 2026 forecast calls for a 14% increase in home sales.
“I don't think we will get there next year,” Yun said. "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.”
Homes purchased last month likely went under contract in August and September, when the average rate on a 30-year mortgage ranged from 6.63% to 6.26%, according to Freddie Mac. The decline in mortgage rates accelerated in October, pulling the average rate down to 6.17% — its lowest level since Oct. 3, 2024. It has ticked higher in the weeks since then.
Home shoppers who can afford to buy at current mortgage rates are benefiting from a wider selection of properties on the market this year than a year ago.
There were 1.52 million unsold homes at the end of last month, down 0.7% from September and up 10.9% from October last year, NAR said. However, the latest inventory snapshot remains well below the roughly 2 million homes for sale that was typical before the COVID-19 pandemic.
“To the degree pre-Covid conditions were more normal, we are still tight on inventory,” said Yun.
