Existing Home Sales Tick Higher in October, but Falling Supply Adds New Pressure

Existing home sales picked up slightly in October, helped by a brief dip in mortgage rates at the end of summer. But that momentum may not last, as the number of homes for sale has started to fall again.

According to the National Association of Realtors (NAR), sales of previously owned homes reached a 4.1 million annual pace, up 1.2% from September and 1.7% higher than one year earlier. These numbers reflect closings, which means most buyers likely signed their contracts in August and September before the government shutdown disrupted some loan processes.

During the time buyers were signing contracts, mortgage rates briefly eased. The average 30-year fixed mortgage rate slid from 6.63% in early August to 6.13% by mid-September, before rising back to 6.37% at the end of the month, according to Mortgage News Daily. As of now, rates are hovering around 6.36%.

Inventory Slips After Months of Gains

After rising for much of 2025, the number of homes for sale fell again. Total inventory dipped to 1.52 million, down 0.7% from September, though still nearly 11% higher than a year earlier.

At the current sales pace, the market has 4.4 months of supply, which is still considered a tight market.

The shrinking supply continues to push prices higher. The median price for an existing home sold in October reached $415,200, up 2.1% from last year and marking the 28th straight month of annual price increases.

“Buyers may benefit from slightly lower mortgage rates and slower seasonal competition,” said Realtor.com Chief Economist Danielle Hale. “But affordability challenges remain and continue to keep sales at historically low levels.”

Homes Taking Longer to Sell

Homes are staying on the market longer than they did a year ago. The typical home spent 34 days on the market in October, compared with 29 days during the same month in 2024. This reflects a slower, less frantic market where buyers have more time to make decisions.

First-Time Buyers Regain Some Ground

First-time homebuyers accounted for 32% of purchases in October, up from 27% one year earlier. However, conditions vary greatly depending on the region:

• Northeast: First-time buyers struggle with tight supply.
• West: High home prices remain a major barrier.
• Midwest: Strongest for affordability, giving new buyers more options.
• South: Inventory is more plentiful, improving entry-level opportunities.

“First-time buyers have an easier time in the Midwest and South, where inventory and pricing are more manageable,” said NAR Chief Economist Lawrence Yun.

Luxury Housing Still Drives Most of the Growth

Higher-priced homes continue to lead the market:

• Homes over $1 million: sales up 16% from last year
• Homes $750,000–$1 million: sales up 10%
• Homes $100,000–$250,000: sales up about 1%
• Homes under $100,000: sales down nearly 3%

This trend shows that buyers with larger budgets are still very active, while affordability pressures hold back lower-priced segments.

What This Means Heading Into 2026

The slight rise in home sales suggests buyers responded quickly when mortgage rates dipped. But falling inventory and steady price growth show the market is still far from balanced.

If rates move lower toward the end of the year as many economists expect demand could strengthen again. The key question will be whether supply keeps shrinking, which would limit any meaningful recovery in sales. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.