Despite the record-breaking 43-day government shutdown, the housing market didn’t stall last month. Existing-home sales eked out a 1.2% increase, the National Association of REALTORS® reported Thursday. That momentum is likely to carry into 2026, especially as mortgage rates are predicted to become less of a barrier for buyers.
“Home sales increased in October, even with the government shutdown, due to home buyers taking advantage of lower mortgage rates,” says Lawrence Yun, NAR’s chief economist. “Rents are decelerating, which will reduce inflation and encourage the Federal Reserve to continue cutting rates and pulling back their quantitative tightening. This will help bring more home buyers into the market since the Fed rate has an indirect impact on mortgage rates.”
Mortgage rates have fallen from about 7% at the start of this year to an average of 6.25% in October. Mortgage rates are easing even as home prices continue to rise—though some markets are seeing more price adjustments, reflecting regional differences.
Existing-home sales—which include single-family homes, townhomes, condos and co-ops—were also up 1.7% compared to a year ago, NAR reports. Meanwhile, mortgage applications for home purchases—a gauge of buyer demand—jumped 26% year-over-year in the latest week, according to the Mortgage Bankers Association, suggesting more buyers are getting mortgage-ready and preparing to enter the housing market.
Yun shared his latest outlook at NAR NXT, The REALTOR® Experience, in Houston last week, forecasting that home sales could post a double-digit rebound in 2026—up 14% from 2025’s mostly stagnant pace.
Read more: Housing Market Set for a 2026 Comeback, NAR Predicts
“Next year is really the year that we will see a measurable increase in sales,” Yun told attendees at last week’s Residential Economic Issues and Trends Forum.
Home Prices Remain Elevated
While some markets are seeing “temporary adjustments,” as Yun has noted, overall home prices remain strong. The median existing-home price in October rose 2.1% year-over-year to $415,200. NAR also projects a 4% rise in median prices in 2026, with that upward trend continuing.
Housing shortages persist, even as inventories have seen some improvement, up about 11% from a year ago. Markets with the leanest housing supplies continue to see the most price jumps.
Also helping to keep prices strong, NAR’s data shows distressed sales—foreclosures and short sales—remain extremely low, at just 2% of October transactions, the same as a year ago.
Homeowners’ large equity gains over recent years are also influencing the market. Many move-up buyers are leveraging equity for their next purchase, helping fuel the high share of all-cash buyers—29% of transactions in October, according to the latest REALTORS® Confidence Index report.
More First-Time Buyers—Depending on Where You Live
NAR’s newly released 2025 Profile of Home Buyers and Sellers report recently made news headlines for its stark finding: First-time home buyers dropped to a record low of 21%, far below their 40% historical norm. They’re also much older than in the past—a record median age of 40.
But monthly activity could hint at some signs of improvement. First-time buyers made up 32% of October sales, up from 27% a year ago, NAR’s latest report shows.
“First-time buyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices,” Yun says. “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.”
Location Matters
While some markets continue to see multiple offers—with one in five homes still selling above list price—others are experiencing more price reductions and slower sales. With seasonal slowdowns underway, sellers are rediscovering the importance of pricing correctly, and it may require a price reduction for properties that linger, Yun said at last week’s conference.
Nationally, homes are taking longer to sell: A median of 34 days on the market in October, up from 29 days a year ago, according to the REALTORS® Confidence Index.
Across the country, three of the four major U.S. regions posted home sales increases in October, with the West being the exception. Home prices rose across all regions, led by a 6.5% annual jump in the Northeast, where housing inventories remain particularly tight.
Here’s a closer look at how existing-home sales fared across the country in October:
- Northeast: Sales held steady last month compared to September, remaining at an annual rate of 490,000. Still, that marks a 4.3% increase from a year ago. Median price: $503,700, up 6.5% from October 2024.
- Midwest: Sales rose 5.3% in October compared to September, settling in at an annual rate of 990,000. Sales are up 2.1% compared to last year. Median price: $319,500, up 4.6% from a year ago.
- South: Existing-home sales saw a modest 0.5% increase last month to an annual rate of 1.86 million. Sales are up 2.8% from a year ago. Median price: $362,300, up 0.3% compared to last year.
- West: Sales fell 1.3% in October compared to September to an annual rate of 760,000. Sales are down 2.6% compared to a year ago. Median price: $628,500, up 0.1% from a year ago.
