Homes under contract fell 10.5% in October 2026, the steepest drop in three years
The US housing market closed October with more homes on the shelf than at any point in four years, and fewer buyers in a position to reach for them.
Active inventory grew 7.4% year over year to 1,183,500 homes nationally, extending four consecutive months of gains, while homes under contract fell 10.5%, the sharpest annual drop since October 2023, according to Realtor.com’s October 2026 monthly housing report.
The gap between those two figures captures an uncomfortable reality for mortgage professionals: supply is recovering, but demand is not keeping pace.
Thirty-year mortgage rates averaged 7.33% in October, sitting 110 basis points above a year earlier.
The national median list price slipped 2.2% year over year to $415,000, the 12th consecutive month of annual declines.
Buyers retreat as rates take a toll
Contract signings fell 17% year over year, and the preliminary share of active listings with price cuts reached 20.5%, the highest October figure since 2022, though that figure eased from September.
For brokers tracking US housing supply reaching a six-year high earlier this year, the inventory trend reads as continuity. The demand retreat is sharpening.
“The market is cooling on both sides, but in different ways,” said Danielle Hale, chief economist at Realtor.com in New York.
“Buyers are stepping back as higher mortgage rates cut into their buying power, while sellers are listing less often without a broad increase in delistings or price cuts. We’re seeing a pause in new supply, but owners who already have homes on the market appear to be largely unphased.”
Mortgage rates have eased from recent highs, and Kristin O'Neil of Open Door Lending says buyers may have more financing options available than they realize, including seller concessions and rate buydowns. https://t.co/HCOntlhwqa
— Mortgage Professional America Magazine (@MPAMagazineUS) October 29, 2026
Sellers hold steady despite cooling demand
New listings fell 7.5% year over year, the steepest decline of 2026, with 357,000 homes entering the market in October.
Despite the lighter inflow, active inventory expanded as properties lingered longer.
The delisting rate held at 4.4%, versus 4.6% a year earlier, and the year-over-year active inventory gap with pre-pandemic supply narrowed to 6.7%, the closest it has been since before the pandemic.
“On the seller side, we see more of a pause than an exodus,” said Jake Krimmel, senior economist at Realtor.com in San Francisco.
“New listings are down at a time of year when activity is already seasonally low, but the share of listings with price cuts is only 0.2 percentage points above last year and slipped from September. We also haven’t seen a meaningful increase in delistings. As we approach the holidays, a seller pulling a listing around Halloween or Thanksgiving is not necessarily showing the same distress as one who exits in midsummer.”
Selma Hepp, chief economist at Cotality in Irvine, California, recently told Mortgage Professional America that brokers have a winter selling point for hesitant buyers: “I’m always of the opinion that winter is a good time for buyers because sellers are more flexible. For those that have to sell, they’re more likely to make deals. There’s definitely more discounts as well.”
Rates edged down to 7.24% by October 29, but remained 107 basis points above the prior year.
How the inventory gains play out against persistent rate pressure will be the defining question heading into the new year.
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