Existing home sales rise in October despite government shutdown

Existing home sales rose in October as homebuyers looked to take advantage of lower mortgage rates, according to data released Thursday by the National Association of Realtors (NAR).

In October, the annual pace of existing home sales came in at 4.1 million, up 1.2% compared to a month prior and up 1.7% from October 2024. 

“Falling mortgage rates and more inventory have brought some buyers into the market, but affordability and uncertainty continue to be the two big headwinds in the housing market at the end of 2025,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. “We’re likely to see sales end 2025 only slightly higher than a year ago.”

At the end of October, 1.52 million existing homes were on the market, down 0.7% from September, up but 10.9% from a year ago. This represents 4.4 months of inventory at the current sales pace, down from 4.5 months in September, but up from 4.1 months a year ago.

Even though existing home sales were up on both a monthly and yearly basis, the median days on market was 34 days, up from 33 days a month ago and 29 days a year ago.

Median sales price post gains

Additionally, the median sales price continued to post annual gains, rising to $415,000 in October, up 2.1% from a year ago, marking the 28th consecutive month of year-over-year price increases.

Overall, 32% of sales were to first-time homebuyers, up from 27% a year ago. The share of cash sales also rose annually, jumping from 27% a year ago to 29% in Oct. 2025. The share of individual investors or second-home buyers remained fairly steady on a yearly basis, dropping one percentage point to 16% in Oct. 2025.

Midwest and South saw existing home sales up

Regionally, existing home sales were up month-over-month in the Midwest (990,000 homes) and South (1.86 million homes), which jumped 5.3% and 0.5%, respectively. The sales pace remained flat in the Northeast (490,000 homes) compared to the month prior, but fell 1.3% month-over-month in the West (760,000 homes). On an annual basis, existing home sales rose in the Northeast (4.3%), Midwest (2.1%), and South (2.8%), but fell 2.6% in the West.

“First-time homebuyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “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.”

Heading into 2026, economists are wondering what will win out when it comes to homebuyer sentiment — lower rates or economic uncertainty?

“There is optimism that lower mortgage rates and affordability improvements will lead to an increase in homebuying activity. But we should probably temper expectations for a big surge in sales and listings,” Sturtevant said. “There is still a lot of economic wariness, leading more consumers to pull back on spending and express concerns about the outlook for their personal financial situations.”

Yun, however, is more optimistic.

“Rents are decelerating which will reduce inflation and encourage the Federal Reserve to continue cutting rates and pulling back their quantitative tightening,” Yun said. “This will help bring more homebuyers into the market since the Fed rate has an indirect impact on mortgage rates.”