Home listings pile up in October, but sellers won't slash prices

Homebuyers continue to retreat, but sellers are still digging in, refusing to cut prices or give up. As a result, September's frozen housing market is now October's frozen and increasingly bloated market.

Active inventory in October hit 183,500 homes, up 7.4% year-over-year, according to Realtor.com. That is the fastest annual growth in eight months. Active listings have been rising each month since February. This is despite the fact that new listings are actually falling, down 7.5% from October 2025.

The market has seen several years of extremely lean supply, driven by the homebuying frenzy during the first two years of the pandemic, when mortgage rates hit more than a dozen record lows. Now supply nationally is just 6.6% below typical pre-pandemic levels, the narrowest gap since the pandemic.

"The market is cooling on both sides, but in different ways. Buyers are stepping back as higher mortgage rates cut into their buying power, while sellers are listing less often without a broad increase in delistings or price cuts," said Danielle Hale, chief economist at Realtor.com. "We're seeing a pause in new supply, but owners who already have homes on the market appear to be largely unphased."

Just over 20% of sellers cut prices in October, about the same as both September and October of last year. There was also no meaningful increase in delistings by sellers.

Mortgage rates came down a little bit in October month-to-month, but they are still over a full percentage point higher than a year ago. That continued to weigh on sales. Newly pending sales, representing signed contracts, not closings, dropped 16.8% in October year-over-year, according to Zillow. That was the biggest annual drop since August 2023 and slowest October since 2018.

While rates fell slightly, home prices continued to gain. Zillow estimated the monthly mortgage payment on the typical U.S. home was $2,004 in October, assuming a 20% down payment and excluding taxes and insurance. That is an increase of 12.8% from last year and 4.8% higher than in September, the biggest one-month jump in four years.

"November is shaping up to have an even larger contraction, but the silver lining is that next month is likely going to be the worst of it," said Mischa Fisher, Zillow's chief economist, in a release. "I expect the pace of the slowdown to ease into the new year. There are deals to be had for buyers able to brave the affordability headwinds in the coming months, and the continued inventory buildup means there is a lot of upside for sales into next year if we get rate relief."