October Market Report: Newly Pending Listings See Largest YoY Drop Since 2023
The sudden increase in mortgage rates is weighing on the housing market, just as last month’s pending-sales figures suggested. With rates holding above 7%, home sales dropped sharply in October. Existing-home sales declined 8.7% from a year earlier, although this mainly reflects agreements reached in September, when mortgage rates remained below 7% for much of the month.
Newly pending listings—a leading indicator of closed sales in the following month—were down roughly 16.8% from October last year. This was the steepest annual decline since August 2023 and the slowest October reading since 2018. Sales activity is on track to contract even more sharply in November, but the encouraging news is that next month will likely mark the downturn’s low point. The slowdown is expected to moderate as the new year approaches.
Rising housing costs likely contributed to the decline. In October, the estimated monthly mortgage payment on a typical U.S. home was $2,004, assuming a 20% down payment and excluding taxes and insurance. This was 12.8% higher than a year earlier and 4.8% above September, the largest monthly increase in four years. For a buyer making a 5% down payment and obtaining an FHA loan, which typically carries a lower mortgage rate, the annual increase was similar, at 11.8%. Including insurance, taxes, and maintenance, a median-income household would devote 41.5% of its income to the monthly payment, compared with 39.2% a year ago.
Zillow October Market Report:
| Metro Area* | Typical Home Value (ZHVI) | Home Value Change: MoM | Home Value Change: YoY | Inventory Change: YoY | Sales Count Nowcast Change: YoY | Typical Rent (ZORI) | Rent Change: MoM | Rent Change: YoY |
| U.S. | $364,812 | -0.6% | 0.7% | 3.4% | -8.7% | $1,913 | 0% | 2.9% |
| New York | $730,894 | -0.4% | 4% | 6.9% | -7.8% | $3,450 | -0.4% | 4.2% |
| Los Angeles | $950,752 | -0.4% | 0.8% | 3.4% | -18% | $2,913 | 0.2% | 2.1% |
| Chicago | $357,746 | -0.3% | 4.8% | 2.5% | -6.7% | $2,123 | -0.2% | 4.7% |
| Dallas | $355,891 | -0.7% | -1.9% | -3.3% | -13.8% | $1,647 | -0.1% | 1.1% |
| Houston | $300,750 | -0.6% | -1.9% | 2.9% | -12.3% | $1,622 | -0.1% | 0.3% |
| Washington | $568,160 | -0.6% | -0.5% | 19.1% | -17.3% | $2,379 | -0.1% | 1.9% |
| Philadelphia | $385,629 | -0.5% | 2.1% | 17% | -8.1% | $1,884 | 0.1% | 3.4% |
| Miami | $480,084 | 0.2% | 1.2% | -12.5% | -5.7% | $2,652 | 0.2% | 2.1% |
| Atlanta | $373,053 | -0.6% | -1.7% | 0.4% | -15.9% | $1,828 | 0% | 2.4% |
| Boston | $726,271 | -0.7% | 1.2% | 16.8% | -12% | $2,945 | -0.3% | 2.3% |
Note: *Table ordered by market size
Costs, Activity, Affordability & More
Higher mortgage rates account for nearly all of the increase in borrowing costs. According to the Zillow Home Value Index, the typical U.S. home value fell 0.6% month over month and was just 0.7% above its level a year earlier. At the same time, Freddie Mac reported that mortgage rates averaged 7.33% in October, up from 6.86% in September.
As for-sale activity slows, the rental market continues to gain strength. According to the Zillow Observed Rent Index, the typical U.S. rent has risen 2.9% year over year. This is the strongest annual increase in 19 months and the seventh month in a row that annual rent growth has accelerated.
Although for-sale activity has been notably subdued this fall, buyers who can navigate affordability challenges may find opportunities in the coming months. Buyers typically have greater negotiating power at this time of year, as sellers seek to close deals before the holidays—and that advantage may be even greater this year given current market conditions. Inventory continues to build, creating considerable potential for sales to pick up next year if mortgage rates ease.
Affordability & Sales Activity:
A household earning the median income would have to devote 34.7% of its earnings to the typical monthly mortgage payment in October. This estimate assumes a home at the typical value with a 20% down payment and includes estimated taxes, maintenance, and insurance. The share rose from 32.7% a year earlier and 33.5% in September. A household with the median income would need to spend 26% of its earnings on typical rent in October. That figure was unchanged from both a year earlier and September.
According to Zillow’s preliminary sales-count nowcast, 304,105 homes were sold in October. This is 8.7% fewer than a year earlier and 5.4% fewer than in September. The figures will be revised mid-month.
Newly pending listings—homes changing from for-sale to pending status, rather than completed sales—declined 16.8% year-over-year and 9.1% from September.
Home Values & Rents:
According to the Zillow Observed Rent Index, the typical nationwide rent is $1,913. This is 2.9% above the level of a year ago and unchanged from September. In October, 40.4% of rental listings on Zillow included a concession. This compares with 38.7% a year earlier and 39.6% in September.
The Zillow Home Value Index (ZHVI) puts the typical U.S. home value at $364,812. Home values declined 0.6% month-over-month in October but remained 0.7% higher than a year earlier. The monthly mortgage payment for a typical U.S. home is $2,004, assuming a 20% down payment and excluding taxes and insurance. This is 12.8% higher than it was last year.
Housing Supply & Competition:
There were 1.4 million homes on the market nationwide in October, while active inventory was 3.4% above its level a year earlier and increased 0.4% from September. New listings totaled 328,328 in October, falling 4.2% year over year and 4.4% from September.
Homes took a median of 31 days to go pending in October, two days longer than both a year earlier and September. In October, 26.5% of listings had a price reduction, down from 26.9% a year earlier and 27.3% in September. The latest available data show that 25.6% of homes sold above list price in September, compared with 25.2% a year earlier and 27.5% in August.
The Zillow November Market Report is projected to be released December 4.
To read the full report, click here.
