U.S. home-sale prices fell in October for the first time in more than three years, as higher mortgage rates weakened demand and a growing supply of properties gave buyers more negotiating power.
The national median sale price fell 0.4 percent from $390,000 a year earlier to $388,634, according to Redfin’s report released Nov. 10. This slowed the 2.5 percent increase recorded two months earlier and marked the first annual decline since May 2023.
Pending home sales fell 3.6 percent from September on a seasonally adjusted basis, reaching their lowest level since 2013, excluding the pandemic shutdown in April 2020, Redfin said.
The 30-year fixed mortgage rates averaged 7.33 percent in October, a three-year high and up from 6.86 percent in September. The increase made financing more expensive just as the housing market entered its typically slower fall season.
Freddie Mac reported that the rate eased to 7.18 percent in the week ending Nov. 5, its third consecutive weekly decrease. It was still well above the 6.22 percent average a year earlier.
For buyers, a lower purchase price can reduce how much they need to borrow, but higher borrowing costs can offset those savings with larger monthly payments.
“It’s a buyer’s market, but not many people can afford to buy,” Chen Zhao, Redfin’s head of economics, said in a statement.
San Francisco Defies National Slowdown
Sale prices still rose in more than half of the 50 most populous metropolitan areas Redfin tracks.
San Francisco led the nation with a 16.8 percent annual increase, its largest since 2018. Redfin attributed the strength to wealth generated by the artificial intelligence industry and limited inventory, with active listings down 7 percent.
The New Brunswick, New Jersey, metro area followed, up 7.7 percent. Prices rose 4.4 percent in both New York and Nassau County, where Redfin said years of limited homebuilding continued to constrain supply.
On the other end, Austin recorded the largest decline, at 6.5 percent, followed by Seattle at 5.1 percent and Nashville at 4.9 percent.
“House hunters in most of the country should know that the price they see on a listing may very well be a starting point,” Zhao said.
“They should try offering below the asking price, and negotiating for closing costs, repairs and maybe even mortgage-rate buydowns.”
Asking Prices Fall as Inventory Builds
Slowing homebuying demand also showed up in asking prices. According to Realtor.com, the national median listing price fell 2.2 percent in October from $415,000 a year earlier, marking the 12th consecutive annual decline.
Active listings increased 7.4 percent to 1,183,500 homes, even as new listings fell 7.5 percent, the property search platform reported.
Price reductions appeared on 20.5 percent of active listings, the highest October share since 2022.
“The market is cooling on both sides, but in different ways,” Danielle Hale, Realtor.com’s chief economist, said in a statement.
“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.”
