The leaves are turning brown, the air is crisper with each passing day, and you are beginning to get settled into a comfortable routine as the holiday season approaches. This sentiment appears to be shared among many prospective buyers and sellers, as market activity tends to see a slight slowdown relative to September. Children are settled into the school year, and the recent shifts in temperature and daylight have some families choosing to remain in place. At the same time, other families may have noticed that there is less competition to get into homes, encouraging them to pursue a home purchase. Inclinations such as these can offset each other, which may explain the small changes seen in October; however, they signal larger shifts that tend to occur in the coming months as the year comes to an end.

These are what we call seasonality trends, patterns we see every year around the same time. They help explain how buyers and sellers usually behave as the housing market enters the fall season and offer useful insight for planning real estate strategies. Buyers and sellers can use these seasonal trends to understand the broader market as they decide how to time their home purchase or listing.

It is important to note that the following estimates represent a “normal” pre-pandemic fall (1999-2019). This allows us to compare today’s housing market with what would typically be expected during this time of year.

Supply & Demand

To begin with, we can look at the average month-over-month percentage change of existing-home sales in October. Historically, about 442,000 existing-home sales occur in October, which is slightly fewer than September:

  • September: -15.4%
  • October: -0.9%
  • November: -9.6%
  • December: 3.9%

Historically, existing-home sales decrease by about 0.9% in October. This is the smallest reduction out of all the months on average, which suggests that October does not substantially differ from September. Buyers remain in an in-between period where it has become inconvenient to move due to the school year—yet not as logistically difficult as the winter months, which bring harsher weather and planning around the holidays. As such, buyers likely feel conflicted about moving at this time of year, resulting in little change in sales.

Shifting to inventory, we can look at the percentage change in supply to better understand the position of buyers in October relative to the listing decisions of sellers around this time of year. Historically, about 2.5 million existing homes are available for sale in October. Similar to sales, this represents a small decrease compared to September. This level reflects the pre-pandemic fall conditions, well above today’s inventory, which remains around 1.6 million—about a million homes short of what used to be normal:

  • September: -2.6%
  • October: -1.0%
  • November: -2.7%
  • December: 9.4%

Similar to sales, inventory typically declines by about 1.0% in October, the second smallest decline of the year. With lower prices relative to the summer coupled with the logistical challenges discussed above, many sellers likely feel less motivated to list their home. Additionally, sellers may expect that finding a buyer will be more challenging relative to what was seen in prior months, resulting in longer listing times. This could mean a move closer to Thanksgiving, which poses difficulties as families coordinate holiday plans. Despite this, sellers may sense that their momentum will slow down going into the winter, motivating them to complete a move now when the weather remains favorable so that they can be in a new home before the end of the year.

The trend seen in sales and inventory continues with prices, which also tend to see a reduction of about 1.1% in October. The decrease is relatively low compared to the prior months, but the change represents where prices typically remain through the end of the year as little change is seen in the coming months. Despite the decline, prices remain higher in the fall compared to midwinter through early spring, suggesting the market requires more time to cool coming out of peak summer season, as the motivation to get into a new home before the end of the year sustains activity.

Days on the Market: How Quickly Sellers Can Expect to Find a Buyer

Next, we will look at the number of days a typical home remains on the market to see how market conditions in October impact the time required for a seller to find a deal in the fall season.

The number of days a typical home spends on the market tends to rise by about four days in October, the largest increase since January. The incline represents a continuation of the market cooling that typically begins in September when sales levels see a distinct shift away from peak season. As such, the spike seen in October is likely a residual effect of the initial seasonal change marked by the beginning of the school year.

Buyer Characteristics: Who Is in the Market in October?

Lastly, we will look at the share of first-time and cash buyers to get a sense of the typical buyer in the month of October.

In October, the share of first-time home buyers typically increases by 0.5 percentage points. The modest jump places October on a similar level to May and July when it comes to this demographic and represents the first increase since June. With fewer buyers in the market, first-time buyers may face less competition. Coupled with the logistical benefits of moving before the holidays, alongside harsher weather conditions, October represents one of the last opportunities to move for buyers sensitive to these conditions.

Similar to first-time buyers, the share of cash buyers also sees an uptick of about 0.9 percentage points in October. This is the largest rise since February on average, meaning cash buyers tend to see more opportunities in the fall. Investors are included in this demographic, and they tend to be more motivated by price as they typically seek to time the market for an optimal transaction. October represents a unique opportunity for this strategy, as prices tend to be at their lowest level compared to the remainder of the year.

In October, REALTORS® can expect to see a slight market cooling associated with the season as daylight begins to dwindle and families settle in for the year; however, opportunities for buyers and sellers remain present. Prices are typically at their lowest levels since the spring, and less competition could mean October is the optimal time for buyers to purchase prior to the end of the year.

For sellers, listing a home in October could mean a sale before the cold weather and holiday busyness begins to meaningfully delay the homebuying process, allowing them to lock in a relatively favorable price before demand slows down going into winter. With mortgage rates still elevated and affordability remaining a challenge, less competition and more room to negotiate may be particularly helpful for buyers who are ready to purchase.