Report: Existing home sales spiked in October

According to Redfin, home sales jumped in October because mortgage rates had just hit the lowest level in two years, giving buyers more purchasing power. The Fed had also just cut its benchmark interest rate and outlined plans for future cuts. 

The average interest rate on a 30-year-fixed mortgage bottomed at 6.08 percent during the week ending September 26. Noticing that rates were falling, many Americans started touring homes and making offers in September, which is why pending home sales jumped that month, Redfin reports. Many of those pending transactions were finalized in October, fueling last month’s rise in home sales. But the rise in pending sales didn’t last into October.

Pending sales dipped in October

Pending sales fell 1.1 percent month over month on a seasonally adjusted basis in October. According to Redfin, that’s largely because mortgage rates shot up last month, erasing much of the newfound purchasing power buyers gained over the summer. Mortgage rates now sit at 6.78 percent—close to the highest level since July. Demand was also likely sluggish last month because many prospective buyers decided to hold off until after the presidential election, and others were recovering from hurricanes in the Southeast.

Some homebuyers got cold feet as economic uncertainty and election jitters gripped the country. Redfin reports that roughly 53,000 home purchases were canceled in October, equal to 15.5 percent of homes that went under contract last month. 

“Homebuyers came off the sidelines when mortgage rates dropped, but now that rates spiked back up, things have slowed down again,” said Stayce Mayfield, a Redfin real estate agent in St. Louis. “That’s partly because not all buyers who came off the sidelines actually locked in a rate, so now they’re saying, ‘Well wait, now I’m getting quoted 7 percent when I thought I was going to get 6 percent.’ Sellers are grappling with the same issue; those who locked in low rates during the pandemic and were considering selling and buying a new home are now wondering if they missed the boat.”

The mortgage-rate rollercoaster isn’t expected to end anytime soon. According to Redfin, rates will continue to shift as investors try to gauge the impact of a Trump presidency. They’ll likely stay elevated if President Trump introduces higher tariffs and tax cuts, according to Redfin Economics Research Lead Chen Zhao.

A recovery in demand

Redfin is seeing early signs that demand has begun to recover now that the election is over. Demand from homebuyers requesting service through Redfin’s site was about 25 percent higher this past weekend than the same weekend last year—the largest year-over-year gain since the downturn began in 2022.

While pending sales fell from a month earlier in October, they rose 3.5 percent from a year earlier—the third consecutive year-over-year gain. That, along with the uptick in existing home sales, is what indicates that existing home sales are on pace to end this year higher than last year.

Homes taking longer to sell

The typical home that sold in October spent 41 days on the market, per Redfin. That’s one week slower than a year earlier and is the longest of any October since 2019.

Redfin agents say listings often sit on the market because they’re overpriced, which has led to a pile-up of stale listings.

“Buyers have more information than they’ve ever had about pricing and previous sales, and they want to know that what they’re getting is worth it for the price. That’s why sellers need to price fairly in this market,” said Cory Kirkland, a Redfin agent in Columbus, Ohio. “Sellers are asking buyers to pay $500,000 for a home they bought in 2020 for $350,000 and didn’t put any work into, and buyers are saying no.”

Just over one-quarter (27.7 percent) of homes that sold in October went for more than their asking price, down from 31.7 percent a year earlier and the lowest October share since 2019.

October 2024 metro housing trends

• Prices: Median sale prices rose most from a year earlier in Milwaukee (13.6 percent), Fort Lauderdale, FL (13.3 percent) and St. Louis (12.2 percent). They fell in just two metros: Austin, Texas (-3.4%) and San Antonio (-1.3 percent).
• Pending sales: Pending sales rose most in San Jose, Calif. (32.1 percent), San Francisco (25.3 percent) and Oakland, Calif. (22%). They fell most in Tampa (-24.5 percent), West Palm Beach (-15.7 percent) and Fort Lauderdale (-12.3 percent).
• Closed home sales: Home sales rose most in Seattle (26.9 percent), Sacramento (20.1 percent) and Portland, Ore. (18.3 percent). They fell most in Fort Lauderdale (-16.3 percent), Tampa (-15.6 percent) and Miami (-14.1 percent).
• New listings: New listings rose most in Seattle (23.5 percent), Anaheim, Calif. (17.5 percent) and Sacramento (17.4 percent). They fell most in Tampa (-27.3 percent), Atlanta (-14.5 percent) and West Palm Beach (-11.7 percent).
• Active listings: Active listings rose most in Cincinnati (39.7 percent), Fort Lauderdale (36.6 percent) and San Diego (36.5 percent). They fell in two metros: New York (-4.4 percent) and Atlanta (-1.4 percent).
• Sold above list price: In San Jose, 64.4 percent of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Newark, N.J. (62.5 percent) and San Francisco (60.8 percent). The lowest shares were in West Palm Beach (6.2 percent), Miami (9.2 percent) and Fort Lauderdale (10 percent).

Read Redfin's full report here.