Higher mortgage rates are slowing home sales this fall, but the shifting market is still creating fresh opportunities for buyers and sellers who are willing to make a move. Existing-home sales fell 5.5% in October compared to September and were down 8.8% annually, the National Association of REALTOR® reported on Thursday.
Higher mortgage rates have been largely to blame. Rates climbed above 7% in late September for the first time in more than a year and have remained elevated ever since. The 30-year rate averaged 7.33% for the month of October, up from 6.25% a year earlier, according to Freddie Mac. That jump in borrowing costs added, for example, about $216 per month to payments on a $300,000 mortgage compared to a year earlier, further stretching affordability and keeping many buyers on the sidelines.
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” says Lawrence Yun, NAR’s chief economist. “As a result, home sales fell to their lowest level since August 2010.” Still, Yun adds, “based on the current underwhelming home sales pace at a time of consistent job growth, there could be sizable pent-up demand if mortgage rates decline.”
Homeowners Still Benefiting Off the Rise in Equity
Home prices have remained largely resilient, even as price growth has tapered off somewhat in recent months amid rising housing inventories. Median home prices were up 0.4% in October compared to a year ago, reaching $416,700 nationally, according to NAR’s research.
“Despite fewer transactions in October, the 88 million homeowners across the country are largely in a comfortable financial position due to sizable housing wealth accumulation,” Yun says.
Meanwhile, distressed sales—including foreclosures and short sales—remain near historical lows, accounting for just 2% of transactions in October, as most homeowners continue to sell their homes for significantly more than they originally paid.
Over the past seven years, the average home has appreciated by $146,000, according to NAR research.
Related: Older Buyers, Sellers Are Cashing in on the Housing Market
That accumulated equity is also helping fuel more cash purchases in the housing market. All-cash sales accounted for 29% of transactions in October, up from 27% in the previous month, according to NAR. Individual investors and second-home buyers, who often pay in cash, are also claiming a larger share of the market, accounting for 20% of transactions in October, up from 16% a year ago.
Find how much housing wealth homeowners have accumulated in your metro area over the past four years using NAR’s Metro Market Statistics Dashboard.
Buyers May Be Finding More Negotiating Room
More homes are on the market than a year ago, with inventory up 4.6% and the supply of unsold homes reaching a 5.1-month supply, a level considered more balanced, according to NAR. Homes are also taking longer to sell, spending a median of 35 days on the market, up from 33 days in September. That slower pace is giving buyers more time to weigh their options without the urgency that characterized more recent markets. Months’ supply has recently been hovering near its highest level since 2015, according to NAR research.
Sellers are showing a greater willingness to compete for buyers’ attention, particularly as higher mortgage rates put additional pressure on affordability.
About 20.5% of active listings saw price reductions in October, the highest for the month since 2022 and the second-highest of 2026, just behind September’s 20.8%, according to realtor.com®. Rather than pulling their homes off the market, many sellers are choosing to stay listed and adjust their asking prices to attract buyers.
Those price cuts could offer some relief to buyers struggling with higher borrowing costs, particularly first-time buyers who have been increasingly squeezed out of the market. First-time buyers accounted for 29% of existing-home sales in October, down from 31% in September and 32% a year earlier, according to NAR. Historically, first-time buyers made up about 40% of sales.
Related: Median First-Time Buyer Age Is Still 40: The Costs of Delaying Are Adding Up
Overall, more markets are starting to tilt in buyers’ favor. Realtor.com®’s new Market Clock gauges buyer and seller leverage nationally and across metro areas based on housing inventory, sales and contract activity. Its latest reading shows about two-thirds of the 100 largest metros now favor buyers or are trending in that direction.
Home Sales By Region
Last month, sales were down by double-digit percentages annually in the West, which has been seeing some of the largest pullbacks in home sales this fall. The West has some of the highest home prices in the country, making buyers in the region particularly vulnerable to affordability pressures from higher mortgage rates.
Here’s a closer look at how existing-home sales fared across the country last month.
- Northeast: Existing-home sales were unchanged on a month-to-month comparison, remaining at an annual rate of 470,000. However, sales were down 4.1% from a year ago. Median price: $519,600, up 3.2% from October 2025.
- Midwest: Sales decreased 3.2% in October compared to September, settling in at an annual rate of 900,000. Sales were down 8.2% from a year ago. Median price: $324,300, up 1.5% from October 2025.
- South: Sales were down 6.5% compared to September and at an annual rate of 1.73 million. Sales are down 8% from October 2025. Median price: $360,900, down 0.4% from a year ago.
- West: Sales fell 9.7% in October compared to September, reaching an annual rate of 650,000. Sales are down 14.5% from a year ago. Median price: $624,300, unchanged from a year earlier.
