National Real Estate Market Update – October 2025

Home Sales Rise as Mortgage Rates Continue to Ease

The U.S. housing market saw a welcome boost in October, with existing-home sales increasing by 1.2% compared to September, according to the latest National Association of REALTORS® (NAR) report. Year-over-year, sales were also up 1.7%, signaling steady improvement as falling mortgage rates and shifting economic conditions bring more buyers back into the market.

Month-over-month gains were led by the Midwest and South, while the Northeast held steady and the West experienced a slight decline. Still, on an annual basis, most regions posted growth—with the West being the only area to see lower sales compared to last year.

Inventory Trends & Market Balance

Total housing inventory for October came in at 1.52 million units, down just 0.7% from September but up nearly 11% from this time last year. This represents a 4.4-month supply of homes—slightly lower than September’s 4.5 months but higher than the 4.1 months seen one year ago.

NAR Chief Economist Dr. Lawrence Yun highlights the shift:

“Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates. Improving affordability is bringing more buyers into the market.”

While inventory is at a five-year high, Yun notes it still sits below pre-pandemic levels—meaning opportunities exist for buyers, but competition hasn’t disappeared.

Prices Continue Their Upward Trend

The national median existing-home price reached $415,200, up 2.1% from October 2024 and marking the 28th consecutive month of year-over-year price gains.

Regional price highlights include:

• Northeast: $503,700 (+6.5% YoY)

• Midwest: $319,500 (+4.6% YoY)

• South: $362,300 (+0.3% YoY)

• West: $628,500 (+0.1% YoY)

Even with rising prices, slowing rent growth and interest rate declines are helping improve affordability across many markets.

Single-Family vs. Condo Sales

Single-Family Homes

• Sales rose 0.8% from September

• Up 1.9% compared to October 2024

• Median price: $420,600 (+2.2%)

Condos & Co-ops

• Sales increased 5.4% month-over-month

• Flat year-over-year

• Median price: $363,700 (+0.9%)

Strong condo activity indicates buyers are still seeking lower-price-entry points, especially in markets where single-family homes remain competitive.

Regional Market Highlights

Northeast

• Sales unchanged month-over-month

• Up 4.3% year-over-year

• Median price: $503,700 (+6.5%)

Midwest

• Sales jumped 5.3% month-over-month

• Up 2.1% year-over-year

• Median price: $319,500 (+4.6%)

South

• Sales up 0.5% from September

• Up 2.8% year-over-year

• Median price: $362,300 (+0.3%)

West

• Sales down 1.3% month-over-month

• Down 2.6% year-over-year

• Median price: $628,500 (+0.1%)

The Midwest stands out once again as the most affordable region, with abundant inventory and strong buyer momentum. The West continues to feel pressure from high home prices limiting first-time buyer activity.

Buyer & Seller Activity

• Median time on market: 34 days (slightly longer than last year)

• First-time buyers: 32% (up from 27% last year—a positive sign for affordability)

• Cash buyers: 29%

• Investor/second-home buyers: 16%

• Distressed sales: 2% (still historically low)

Despite slight month-over-month shifts, the buyer pool remains diverse, active, and more engaged than earlier in the year.

Mortgage Rates

The average 30-year fixed-rate mortgage dropped to 6.25% in October—down from 6.35% in September and slightly below the 6.43% level from one year ago.

Falling rates combined with slowing rent growth may prompt the Federal Reserve to continue rate cuts, which could further fuel buyer activity heading into 2026.

Key Takeaways

For Buyers:

Declining mortgage rates and rising inventory are creating more opportunities—and less competition—than we’ve seen in years. With prices still gradually increasing, buying sooner rather than later may offer long-term benefits.

For Sellers:

Home prices remain strong, and demand is increasing as rates ease. Well-priced and well-presented homes continue to attract solid offers, especially in mid-priced markets.

For Everyone Watching the Market:

The trend toward improved affordability and higher inventory is shaping a healthier, more balanced market. As we move into the end of the year, all signs point to increased activity and strong momentum heading into 2026.

Krista Freshour

Realtor

865-776-9608

Information provided by National Association of REALTORS®