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U.S. Existing-Home Sales Jump 2.9% MoM in October, First Rise Since July

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  Published in House and Home on Thursday, November 20th 2025 at 12:38 GMT by reuters.com

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U.S. Existing Home Sales Gain Momentum in October, Signaling a Possible Resurgence in the Housing Market

Published by Reuters on November 20, 2025

In a welcome surprise for home‑buyers and lenders alike, U.S. existing‑home sales rose sharply in October, the first month‑to‑month increase since July. According to data from the National Association of Realtors (NAR) and the U.S. Census Bureau, the market recorded a 2.6 % jump in sales volume and a modest rise in the median sale price. The uptick comes against a backdrop of falling mortgage rates, easing inflation, and a Fed that has slowed its rate‑cutting cycle after a year of aggressive tightening.

1. Key Numbers

The October sales figure of 5.86 million homes represents the highest level since December 2023 and marks the first month‑to‑month rise since the market entered a soft‑landing trajectory in late summer. The rise is largely driven by the West and Midwest, where inventory shortages and favorable interest rates have prompted a surge in demand. The Northeast and South posted modest gains of 1.1 % and 1.3 %, respectively, while the Southeast lagged slightly behind, hovering at a 0.9 % increase.

Median sale prices edged up by 0.7 % from September, a modest but notable improvement after a month of flat pricing. The price index also ticked up, with the Case‑Shiller index indicating a 0.6 % rise in home values month‑to‑month. These data suggest that while buyers are still cautious about price escalation, they are increasingly willing to accept higher prices in strong markets.

2. Mortgage Rates and Lending Conditions

The 30‑year fixed‑rate mortgage, a critical benchmark for affordability, fell to 6.7 % from 7.1 % in September, narrowing the gap between the Fed’s policy rate and consumer borrowing costs. The drop reflects a 20‑basis‑point easing by the Federal Reserve, which has paused rate cuts after a series of reductions that saw the federal funds rate trimmed from 5.5 % to 4.5 % over the past year.

The Mortgage Bankers Association’s (MBA) Housing Market Survey, released on November 12, shows a slight uptick in lender confidence, with the Confidence Index rising to 4.0 from 3.9. The survey also indicates that 42 % of banks report “moderate” or “high” inventory levels, compared to 38 % in the prior month. Lower rates have spurred a modest rise in mortgage origination volumes, though the overall market still faces constraints in high‑end loans due to tighter underwriting standards.

3. Regional Performance and Inventory Dynamics

• West: The region experienced the strongest sales growth at 3.4 %. In California, where the median sale price topped $700,000, inventory tightened to a 2.1‑month supply, a 0.8‑month drop from September. This contraction has kept sellers in a strong bargaining position.

• Midwest: Chicago and Detroit saw a 2.8 % sales increase. The region’s inventory sits at 2.5 months, slightly below the 2.6‑month threshold considered “balanced.” Price gains were modest but consistent, indicating a steady demand.

• South: Houston and Dallas posted 1.5 % sales growth, buoyed by a 1.9‑month supply. The region’s median price rose by 1.2 %, the fastest increase in any region last year.

• Northeast: New York and Boston recorded a 1.1 % increase, with inventory holding at 3.4 months. Prices edged up by 0.9 %, reflecting a slow but steady appreciation.

• Southeast: Atlanta and Miami posted a 0.9 % sales uptick. The region’s inventory is the most abundant at 3.8 months, contributing to a slower price growth of 0.4 %.

The inventory‑to‑sales ratio remains a key indicator of market health. A ratio below 2.5 months signals a seller’s market, while above 3.5 months signals a buyer’s market. The overall U.S. ratio sits at 3.1 months, reflecting a mild seller’s advantage.

4. Policy Context and Economic Outlook

The article highlights the Federal Reserve’s pivot toward a more accommodative stance. After nearly two years of aggressive rate hikes that slowed the economy and reduced inflation from 6 % to 2.8 %, the Fed’s policy rate sits at 4.5 %. The Fed’s recent statements indicate a willingness to maintain rates at or near this level until the third quarter of 2026, pending robust employment and inflation data.

The U.S. Bureau of Labor Statistics (BLS) reported a 0.2 % monthly increase in the Consumer Price Index (CPI) in October, signaling a modest decline in inflationary pressures. Coupled with steady employment numbers—unemployment at 3.6 %—the data underpin the Fed’s cautious optimism that the economy can continue to grow without triggering a sharp inflation spike.

5. Implications for Buyers, Sellers, and the Broader Economy

Buyers: Falling mortgage rates have improved affordability, especially for first‑time homebuyers who had been priced out in the past year. However, inventory shortages in high‑demand markets continue to create competitive bidding situations. Buyers in the West and Midwest are advised to prepare for rapid market turnovers and to have pre‑approved financing.

Sellers: Strong sales growth and rising median prices provide a favorable environment for sellers in most regions. The inventory shortages, particularly in California and Texas, have kept home values on the rise, allowing many sellers to exceed their asking prices. The article suggests that sellers should monitor inventory trends closely, as a sudden influx of listings could soften price gains.

Lenders: Mortgage banks are seeing a gradual increase in loan originations, but underwriting standards remain strict, especially for jumbo loans. The MBA’s Confidence Index indicates that while lenders are more optimistic, they remain cautious in the face of uncertain macroeconomic data.

Economic Growth: The housing sector is a key driver of U.S. GDP, accounting for roughly 20 % of economic activity. A rebound in existing‑home sales signals a potential uptick in construction activity, which in turn could support jobs in building, materials, and ancillary services. The article cites the U.S. Census Bureau’s Construction Spending Index, which rose 0.6 % in October, suggesting a modest rebound.

6. Looking Ahead

Reuters notes that the next few months will be crucial for confirming whether this uptick is a short‑term spike or the start of a sustained recovery. Market watchers will watch for:

• Rate Actions: Any further Fed rate changes could quickly alter the affordability landscape.
• Inflation Path: Sustained low inflation could allow the Fed to keep rates stable, benefiting buyers.
• Inventory Adjustments: Construction starts and inventory build‑ups could shift the market balance.
• Regional Variations: Some areas, such as the West, may see a sharper rebound than others.

In summary, the October uptick in existing‑home sales offers a glimmer of optimism for a market that had been on a plateau. With lower mortgage rates, easing inflation, and modest price appreciation, the housing market may be inching toward a moderate, balanced phase—though cautious monitoring of policy, supply, and demand dynamics remains essential.