Affordability Hits a Three-Year High, Sparks a Fall Housing Flurry
Key takeaways:
- An October dip in mortgage rates helped drive a 5% annual increase in both new listings and pending sales.
- Inventory continues to recover from record lows reached in 2022 — the current 17% shortfall from pre-pandemic averages is the smallest since March 2020.
- Affordability for home buyers reached a three-year high as monthly mortgage payments fell 1.8% from last year.
Thanksgiving may mean eating turkey sandwiches on cardboard-box tables for plenty of home buyers this year. Buyers and sellers defied seasonal cooling patterns to turn in the strongest October housing market in three years.
Improved affordability helped drive a rare fall surge in sellers both listing their homes and accepting offers from buyers; both metrics are up 5% year over year to levels not seen in October since 2022, and both stayed flat from September instead of ticking down, as they typically do this time of year.
The average 30-year mortgage rate eased to 6.25%, reaching the lowest monthly average1 in more than a year. Home values stayed steady from last year, with the typical U.S. home value up 0.1% from last October to $362,117, according to the Zillow Home Value Index. Together those factors reduced mortgage payments by 1.8% compared to last October.2
Paired with rising incomes, this has improved affordability for new home buyers to three-year highs — though costs are still a significant challenge. The median-earning household would spend 32.9% of its income on a mortgage on the typical home, given a 20% down payment. That’s the smallest share of income needed since August 2022. However, it’s still higher than the 30% threshold at which housing is considered a financial burden, and a 20% down payment is a serious hurdle at more than $72,000.
More sellers test the market ahead of the holidays
Sellers reemerged in October after a sluggish summer, taking advantage of stronger demand and enjoying increased affordability themselves if they purchased another home. New listings picked up most compared to last year in Tampa, Raleigh, Orlando, Columbus, Louisville and Indianapolis.
Total inventory has risen 12.8% since last year and is 17.3% lower than 2018–2019 averages for this time of year. This is the smallest supply deficit since the pandemic began in March 2020 and a vast improvement over the 51% shortfall seen in February 2022, when the supply shortfall was largest.
Sales momentum improves as buyers seize lower rates
Buyers also responded quickly to the rate reprieve. Newly pending listings fell just 0.1% from September, but climbed 5% from a year earlier, signaling resilience in a month when demand typically tapers off.
The sharpest increases in newly pending sales were seen in Tampa, Boston, Orlando, Jacksonville and Miami, where activity rebounded from last year’s unusually slow conditions and “snowbird” demand likely provided a boost.
Competition cools, bringing buyers markets to new frontiers
Zillow’s Market Heat Index shows competition among buyers is easing along seasonal lines and is far cooler than in past years.
The market is balanced on the national scale, but 19 major markets now favor buyers, three more markets than in September and up from nine last October. These are concentrated in the South, but cold weather and accumulating inventory are bringing them farther north and west; new additions in October were Cincinnati, Milwaukee and Birmingham.
Sellers retain the strongest edge in Hartford, San Francisco, New York, San Jose and Providence, while Miami, Indianapolis, Milwaukee, Pittsburgh and New Orleans rank among the country’s strongest buyers markets.
October 2025 Market Report
Home values
- The typical U.S. home value is $362,117.
- The typical monthly mortgage payment, assuming 20% down, is $1,778.
- Home values climbed month over month in 4 of the 50 largest metro areas in October. Gains were biggest in San Jose (0.4%), New York (0.4%), San Francisco (0.1%), Salt Lake City (0.1%), and Los Angeles (0%).
- Home values fell, on a monthly basis, in 38 major metro areas. The largest monthly drops were in Austin (-1%), Pittsburgh (-0.9%), Dallas (-0.7%), San Antonio (-0.6%), and Atlanta (-0.6%).
- Home values are up from year-ago levels in 26 of the 50 largest metro areas. Annual price gains are highest in Cleveland (4.5%), Hartford (4.4%), Milwaukee (4%), Buffalo (3.7%), and Chicago (3.7%).
- Home values are down from year-ago levels in 24 major metro areas. The largest drops were in Austin (-6.1%), Tampa (-6.1%), Miami (-4.8%), Orlando (-4.6%), and Dallas (-4%).
- The typical mortgage payment is down 1.8% from last year and has increased by 99.3% since pre-pandemic.
Inventory and new listings
- New listings increased by 0.3% month over month in October.
- New listings increased by 5% this month compared to last year.
- New listings are -11.4% [higher/lower] than pre-pandemic levels.
- Total inventory (the number of listings active at any time during the month) in October decreased by 0.4% from last month.
- The median age of inventory, the typical time since the initial list date for active for-sale listings, was 69 days.
- There were 12.8% [more/fewer] listings active in October compared to last year.
- Inventory levels are -17.3% [higher/lower] than pre-pandemic levels for the month.
Price cuts and share sold above list
- 26.9% of listings in October had a price cut. That is up 0.7ppts month over month.
- There are 2.2ppts [more/fewer] listings with a price cut compared to last year.
- 25.2% of homes sold above their list price last month. That is down 1.6ppts month over month.
- -3.5ppts [more/fewer] homes sold above their list price compared to last year.
Newly pending sales
- Newly pending listings decreased by 0.1% in October from the prior month.
- Newly pending listings increased by 5% from last year.
- Median days to pending, the typical time since initial list date for homes that went under contract in a month, is at 28 days in October, up 1 day since last month.
- Median days to pending increased by 4 days from last year.
Market heat index
- Zillow’s market heat index shows the nation is currently a neutral market.
- The strongest sellers markets in the country are Hartford, San Francisco, New York, San Jose, and Providence.
- The strongest buyers markets in the country are Miami, Indianapolis, Milwaukee, Pittsburgh, and New Orleans.
Rents
- Asking rents decreased by 0.2% month over month in October. The pre-pandemic average for this time of year is 0%.
- Rents are now up 2.3% from last year.
- Rents fell, on a monthly basis, in 39 major metro areas. The largest monthly drops are in Denver (-1%), San Antonio (-0.8%), Austin (-0.7%), Richmond (-0.6%), and Washington (-0.6%).
- Rents are up from year-ago levels in 45 of the 50 largest metro areas. Annual rent increases are highest in San Francisco (6%), Chicago (5.8%), Cleveland (5.4%), New York (5.3%), and Providence (5.1%).
[1] Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, November 13, 2025.
[2] For the typical U.S. home, assuming a 20% down payment.