Is the US housing market about to turn a corner?
Existing-home sales climbed 1.2% in October to a seasonally adjusted annual rate of 4.1 million units, marking the strongest performance since February as homebuyers took advantage of falling mortgage rates.
The uptick, reported by the National Association of Realtors this week, underscores a modest but meaningful rebound in a market that has languished near historically low levels throughout 2025.
"Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates," said NAR chief economist Lawrence Yun.
The 30-year fixed mortgage rate averaged 6.25% in October, down from 6.35% in September and 6.43% a year ago – a meaningful differential that appears to be shifting buyer behaviour.
Year-over-year, sales advanced 1.7%, with the median home price reaching $415,200, up 2.1% from October 2024. This marks the 28th consecutive month of annual price gains, reflecting continued supply constraints despite a 10.9% year-over-year increase in inventory to 1.52 million units.
Regional dynamics remain uneven. The Midwest led with a 5.3% monthly gain, while the Northeast held flat and the West declined 1.3%.
Geographic variations in affordability continue to create barriers for specific buyer segments. First-time homebuyers, who comprised 32% of October sales, faced regional headwinds.
"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."
The market's upper tiers showed particular strength. Sales of homes priced above $750,000 surged 10% to 16% from the year prior, while affordability-challenged segments saw tepid growth.
Homes priced between $100,000 and $250,000 rose just 1%, underscoring persistent affordability pressures that continue to constrain transaction volume.
Homes remained on market 34 days, the longest stretch for any October on record since 2019.
Cash sales represented 29% of transactions, essentially flat compared to September, while individual investors or second-home buyers accounted for 16% of sales, marking a modest recovery from September's 15%.
Broader market signals suggest further momentum could hinge on deeper rate cuts. Industry observers point to 2026 recovery forecasts – NAR projects a 14% surge in existing-home sales as job growth stabilizes and inventory conditions improve.
The US housing market is also expected to make incremental progress in 2026, with affordability inching higher and regional differences persisting, according to First American.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
