Housing Market: October inventory hits 183,500 homes as prices rise

The U.S. housing market entered late 2026 with a sharp imbalance between available homes and buyer activity. New data released on November 9 shows a surge in inventory colliding with a drop in closed deals.

Active inventory reached 183,500 homes in October, up 7.4 percent from the same period last year. This marks the fastest annual growth in listings over the past eight months. Listings have risen every month since February, even as new listings dropped 7.5 percent compared to October 2025.

Danielle Hale, chief economist at Realtor.com, said buyers are retreating as higher mortgage rates reduce their purchasing power. Sellers are listing less frequently, but those who already have homes on the market are not lowering prices or withdrawing listings. She described the situation as a pause in new supply rather than a collapse in existing inventory.

Pricing behavior remains steady, with just over 20 percent of sellers reducing asking prices in October. This rate is similar to September and to October of the previous year. There was no major increase in sellers pulling their homes off the market entirely.

Mortgage rates declined slightly in October but remain more than a full percentage point higher than a year ago. Zillow reported that newly pending sales fell 16.8 percent year-over-year, the largest annual drop since August 2023. This represents the slowest October for sales since 2018.

Home prices continued to climb despite the drop in transaction volume. The estimated monthly mortgage payment on a typical U.S. home was $2,004 in October, assuming a 20 percent down payment. This figure excludes taxes and insurance. The payment is up 12.8 percent from a year ago and 4.8 percent from September, the largest single-month increase in four years.

Mischa Fisher, Zillow's chief economist, expects November to see an even larger contraction in sales. He suggested that November may mark the low point of the current slowdown before the pace of deceleration eases toward the new year.