The homebuyer kept backing out, but the seller kept digging, refusing to lower the price or give up. As a result, the September frozen housing market is now a frozen market and is increasing in October.
Active inventory in October reached 183,500 homes, up 7.4% year over year, according to Realtor.com. This was the fastest annual growth in eight months. Active listings have been increasing every month since February. This is despite the fact that new listings are down, down 7.5% since October 2025.
The market has experienced several years of extremely lean supply, fueled by a home-buying frenzy during the first two years of the pandemic, when mortgage rates hit more than a record high. Currently the national supply is only 6.6% below typical pre-pandemic levels, the narrowest gap since the pandemic.
“The market has cooled on both sides, but in different ways. Buyers are pulling back as higher mortgage rates cut into purchasing power, while sellers are listing less frequently without adding delistings or price cuts,” said Danielle Hale, chief economist at Realtor.com. “We’re seeing a pause in new supply, but existing homeowners on the market seem to be largely phased out.”
Just over 20% of sales cut prices in October, about the same as September and October last year. There was also no significant increase in delisting by sellers.
Mortgage rates fell slightly in October month over month, but were still more than a percentage point higher than a year ago. That continues to weigh on sales. Newly pending sales, which represent signed contracts, not closings, fell 16.8% in October year-over-year, according to Zillow. This was the biggest annual decline since August 2023 and the slowest October since 2018.
While rates have fallen slightly, home prices have continued to rise. Zillow estimates the monthly mortgage payment on a typical US home was $2,004 in October, assuming a 20% down payment and excluding taxes and insurance. It rose 12.8% from last year and was 4.8% higher than in September, the biggest one-month jump in four years.
“November has created a bigger contraction, but the silver lining is that next month will be the worst,” Mischa Fisher, Zillow’s chief economist, said in a release. “I expect the pace of the slowdown to ease into the new year. There are offers for buyers to be able to brave affordability headwinds in the coming months, and the inventory buildup continues to mean there is a lot of up for sales into next year if we get rate relief.”