Housing News

Lower Mortgage Rates Spur More Home Sales

Thanks to lower mortgage rates, more people jumped into the housing market and bought up existing homes in October.

Mortgage interest rates fell consistently throughout October, eventually falling to the lowest level of the year. That directly led to an increase in home sales, according to a new report from the National Association of Realtors (NAR).

The number of existing home sales increased 1.2% in October over September’s total, per the NAR report. (Existing homes exclude new construction.) Sales were also up 1.7% over October 2024.

“Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” NAR Chief Economist Lawrence Yun said in a statement.

However, home prices continued to rise year-over-year for the 28^th straight month in a row. The median sale price was $415,200 in October, up 2.1% from October of last year, according to NAR.

The good news for buyers was impact of the decline in interest rates is lowering their mortgage payments, despite higher prices. The national median payment for a new home purchase was $2,039 in October, down from $2,067 in September, according to a new report from the Mortgage Bankers Association.

It was also down $88 from October 2024, when rates were higher.

Yun noted that the increase in home sales wasn’t felt in every part of the country.

“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.”

Existing home sales in the Northeast were flat in October compared to September but were up 4.3% year-over-year. In the West, existing home sales were down 1.3% month-over-month and 2.6% year-over-year.

Meanwhile, sales were up in the Midwest by 5.3% over September and 2.1% over October 2024. Home sales in the South were up 0.5% from September and 2.8% year-over-year.

Overall, the total number of homes on the market in October was 1.52 million, down 0.7% from September but up 10.9% from October 2024.