Housing Market Cools as Existing Home Sales Fall for Eighth Straight Month

Published in House and Home on Thursday, August 21st 2025 at 16:39 GMT by Fox 11 News
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The U.S. housing market continues its downward trend, with existing home sales falling for the eighth consecutive month in October, according to data released by the National Association of Realtors (NAR). While affordability remains a significant hurdle and inventory is slowly rising, the persistent decline signals a shift away from the frenzied seller’s market that characterized much of the pandemic era.

October saw 4.09 million homes sold, a decrease of 4.4% from September and 28.5% year-over-year. This marks the lowest sales volume since December 2006, excluding the initial months of the COVID-19 pandemic. The median home price clocked in at $387,900, a slight decrease of 0.9% from October 2022 but still significantly higher than pre-pandemic levels.

Why is the Market Cooling?

Several factors are contributing to this ongoing slowdown. Chief among them is affordability. Mortgage rates have remained stubbornly high, hovering around 7% for 30-year fixed loans – a level not seen in over two decades. This dramatically increases monthly mortgage payments, pricing many potential buyers out of the market. As reported by Freddie Mac, average 30-year fixed rates peaked earlier this year and while there have been slight dips, they remain elevated.

“Higher interest rates are impacting housing affordability,” explained Lawrence Yun, NAR’s chief economist. “This is causing a slowdown in sales activity as buyers hold back.”

Beyond mortgage rates, inflation continues to impact household budgets, leaving less disposable income for down payments and closing costs. Consumer confidence has also been wavering, further contributing to buyer hesitancy. The uncertainty surrounding the economy adds another layer of caution for those considering making a significant investment like purchasing a home.

Inventory Remains Low, But is Slowly Rising

While sales are declining, inventory is slowly increasing, offering a glimmer of hope for buyers. Total housing inventory at the end of October stood at 1.04 million units, up from 1.03 million in September and 2.3% higher than last year. However, this still represents a historically low level.

The increase in inventory is largely due to homes staying on the market longer as buyer demand cools. Homes are taking more time to sell, with days on market rising to 33 days – up from 21 days a year ago. This shift gives buyers more negotiating power and reduces the pressure to make hasty decisions.

Regional Differences & Price Trends

The housing market slowdown isn’t uniform across the country. The Northeast experienced the largest decline in sales, down 30.4% year-over-year. The Midwest saw a decrease of 21.6%, while the South and West fared slightly better with declines of 17.8% and 15.9% respectively.

Price trends also vary by region. While the national median home price is down slightly from last October, some areas are still experiencing price appreciation, albeit at a much slower pace than during the peak of the pandemic boom. The West continues to see relatively stronger prices due to ongoing demand and limited supply in certain markets.

What Does This Mean for Buyers and Sellers?

For potential buyers, the cooling market presents opportunities. With fewer competing offers, buyers have more time to consider their options and negotiate better deals. However, high mortgage rates remain a significant barrier. Waiting for rates to potentially decline could be beneficial, but also risks prices increasing if inventory remains limited.

Sellers, on the other hand, need to adjust their expectations. The days of multiple offers above asking price are largely over. Sellers should focus on pricing their homes competitively and making necessary repairs or upgrades to attract buyers in a more balanced market. Working with an experienced real estate agent is crucial for navigating this changing landscape.

Looking Ahead: A Stabilizing Market?

While the current housing market conditions present challenges, experts anticipate a stabilization in 2024. The Federal Reserve’s potential pause or reduction of interest rate hikes could lead to lower mortgage rates, potentially stimulating buyer demand. However, economic uncertainty and ongoing inflation will continue to influence the market's trajectory.

“The housing market is undergoing a transition,” Yun stated. “While sales are down, inventory is rising, and prices are stabilizing. We expect more balanced conditions in 2024.”