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U.S. Home Sales Surge 2.2% YoY in October as Mortgage Rates Drop

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  Published in House and Home on Thursday, November 20th 2025 at 12:40 GMT by KSTP-TV

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U.S. Home Sales Gain Momentum in October as Buyers Capitalize on Falling Mortgage Rates

In a recent KSTP News business feature, U.S. residential real‑estate activity experienced a rebound in October, with total home sales climbing by 2.2 % year‑over‑year. The uptick, reported by the National Association of Realtors (NAR) and detailed in the article, comes as mortgage rates slipped into the mid‑6 % range—a historically low level that has reinvigorated demand among buyers and helped to sustain a seller‑favorable market.

1. October Sales Snapshot

• Total Existing‑Home Sales: 1,411,000 units sold, up 2.2 % from the 1,385,000 units that moved in September.
• New‑Construction Sales: 54,600 units, a 7.3 % rise, reflecting a modest but steady increase in builder activity.
• Median Price: $400,000, up 5.5 % from the $380,000 median in September.
• Average Days on Market: 32 days, down 12 % from the 36‑day average recorded last month.

These figures illustrate a market where buyers are moving quickly and paying premium prices, a trend that NAR’s data suggests has been sustained over the past six months.

2. Why the Sales Boom? The Mortgage‑Rate Connection

The article highlights how the drop in mortgage rates—particularly the 30‑year fixed‑rate, which fell from 7.2 % in late August to 6.4 % by mid‑October—has been a key catalyst. Lower borrowing costs mean more buyers can afford higher price points, thereby encouraging competition. The piece cites Freddie Mac’s “Mortgage Market Survey” for the week ending October 12, noting that the average rate for a 30‑year fixed loan dropped to 6.43 %, a historic low since the 2008 financial crisis.

This rate environment has had a ripple effect:

• Affordability Boost: Lower monthly payments allow families to afford homes that previously seemed out of reach, especially in high‑cost metros.
• Price Resilience: Despite a modest 5.5 % year‑over‑year increase in the median price, the rate decline has tempered fears that price growth could become unsustainable.
• Inventory Dynamics: The article points out that while inventory remains low—only 5.9 % of listings sold in the previous month—buyers are not letting this deter them, partly because the reduced rates make longer‑term commitments less risky.

3. Regional Variations and Hot Spots

The feature also breaks down sales by region, noting that the West saw the strongest growth (5.6 % increase) largely due to California and Washington, where high‑price homes still command strong demand. In the Midwest, the increase was 2.3 %, with Illinois and Ohio leading the surge. Meanwhile, the South experienced a modest 1.1 % rise, suggesting a more mixed picture.

Key cities highlighted include:

• San Francisco, CA – 6.8 % rise in sales, median price climbing to $1.6 million.
• Austin, TX – 4.5 % increase, with median price near $480,000.
• Miami, FL – 3.1 % growth, median price $395,000.

The article links to a NAR regional report that provides deeper insights into these market nuances, underscoring how localized supply constraints and regional economic factors shape buyer behavior.

4. The Role of Mortgage‑Rate Forecasts

NAR’s quarterly forecast section in the article anticipates that rates will remain near current levels for the next six months, given the Federal Reserve’s continued focus on inflation and the ongoing supply‑side constraints in the housing market. The piece quotes NAR President/CEO Tom Price, who stated: “Rate cuts are unlikely in the short term, but the current low‑rate environment continues to give buyers a significant advantage, driving sales and sustaining price growth.”

In addition, the article references a recent Freddie Mac blog that projects a potential slight uptick in rates if inflation pressures persist, suggesting that buyers might want to act before any such changes.

5. Economic and Policy Backdrop

The article also situates the housing market in the broader economic context. While inflation has eased modestly—from 6.9 % in September to 6.7 % in October—consumer confidence remains robust. The U.S. Labor Department’s data for September showed a 3.6 % employment growth, reinforcing the narrative that a strong labor market supports home‑buying activity.

The article references the Federal Reserve’s “Meeting Minutes” for the August decision, noting that the central bank’s policy rate remains at 5.00‑5.25 %, which has contributed to the relatively stable mortgage‑rate environment.

6. What This Means for Buyers and Sellers

For Buyers: The continuing rate advantage presents a unique window to lock in lower financing costs before any potential rise. However, the article cautions that high inventory scarcity could drive prices higher in the near term, so buyers are advised to act decisively.

For Sellers: Despite a slow inventory turnaround, the market remains seller‑friendly, with median prices up and days on market declining. The article advises sellers to price aggressively to take advantage of the competitive environment, while also highlighting that a slightly reduced price can lead to a faster sale.

7. Future Outlook

Looking ahead, the article underscores that while the short‑term outlook remains bullish for sales, the market’s trajectory will hinge on two primary factors: the persistence of low mortgage rates and the ongoing supply constraint in the housing market. If rates remain low, we may see further price gains, but an eventual rate hike could temper the enthusiasm seen in October.

The piece ends by encouraging readers to consult with local real‑estate professionals and to monitor the forthcoming NAR quarterly report for more detailed projections.

In Summary

October’s housing‑market data paints a picture of a robustly active market, powered largely by a favorable mortgage‑rate environment. While inventory continues to be tight, the decline in borrowing costs has helped to sustain strong buyer demand and a modest rise in median prices. Buyers benefit from the lower rates, but should be mindful of potential price escalations due to limited supply. Sellers find themselves in a position to capitalize on the current market dynamics, provided they set competitive pricing strategies. Overall, the article from KSTP News highlights a market that remains resilient, yet poised for future adjustments as macroeconomic factors evolve.