The typical U.S. home sold for $388,634 in October, down 0.4% from a year earlier, the first annual decline in home-sale prices since May 2023, according to a Redfin report published Nov. 10. Two months earlier, Redfin’s median sale price was still rising 2.5% a year.
The dip is small. What makes it notable is the streak it breaks: by Redfin’s count, prices have risen in nearly every month for the past 13 years, with only a handful of exceptions in 2023. The decline also lands while wages are growing about 4% a year, according to the Atlanta Fed wage tracker figure Redfin cites, which means home prices are now falling relative to incomes.
“National sale prices are losing steam because fewer Americans can afford to buy a home,” Redfin wrote. The company tied the slowdown in contract signings directly to borrowing costs: fewer homes went under contract in October “largely because mortgage rates averaged 7.33%,” a rate Redfin’s data show was up 1.08 percentage points from a year earlier.
Demand is falling faster than prices
The price number is the headline, but the activity numbers underneath it are weaker. In Redfin’s seasonally adjusted data for October:
- Pending sales fell 3.6% from September and 15.1% from a year earlier, to 300,430, the lowest level since 2013 excluding April 2020.
- Closed sales fell 2.1% month over month and 6.7% year over year, the lowest since December 2023. Existing-home sales ran at a seasonally adjusted annual rate of about 4.09 million.
- Cancellations rose: 14.9% of pending sales fell out of contract, up 1.8 points from a year earlier and, outside the spring 2020 pandemic spike, the highest share in Redfin’s records.
- Active listings rose 2% year over year to 1.53 million, the highest since early 2020, while new listings fell 3.9% to their lowest level in more than two years.
- Months of supply rose to 4.3, up half a month from a year earlier. The typical home sat for 50 days.
Sellers are already adjusting. Thirty-six percent of homes that sold in October had at least one price drop, which Redfin called “the highest share in our records.” Sixty-one percent sold below their original list price, and the average home sold for 96.1% of its original asking price.
The cancellation figure extends a trend: a month ago, pending sales dropped in every major metro as 14.5% of deals fell through. October’s numbers show both measures moving further in the same direction, with pending sales falling year over year in every major metro for a second straight month.
Where prices fell, and where they did not
Despite the national dip, prices rose in more than half of the 50 most populous metros Redfin tracks. The split runs largely along supply lines.
The steepest declines were in Austin, Texas, down 6.5% to a median of $408,564; Seattle, down 5.1% to $797,197; and Nashville, Tenn., down 4.9% to $463,371. Charlotte, N.C., fell 3.4% and Fort Lauderdale, Fla., 3.7%. Seattle also posted the largest pending-sales drop of any major metro, 28.7%, and a 22.3% jump in active listings.
On the other side, San Francisco’s median sale price rose 16.8% to $1,811,133, its biggest gain since 2018, as active listings fell 7%. Redfin attributes the competition there to AI-related wealth chasing scarce inventory, a split we examined earlier in San Francisco and Seattle’s diverging markets. New Brunswick, N.J., rose 7.7% and Pittsburgh 6.5%. Across the New York City area, Redfin said years of limited homebuilding have left buyers competing for relatively few homes; New York and Nassau County, N.Y., each rose 4.4%.
Inventory moved in opposite directions by region. Active listings climbed most in San Jose, Calif. (22.5%), Seattle and Boston (20.3%), while they fell most in Fort Lauderdale (13.5%), West Palm Beach (12.4%) and Jacksonville, Fla. (11.9%). Florida’s shrinking listing counts coincided with faster sales: Fort Lauderdale’s typical home sold in 90 days, 18 days faster than a year earlier, the largest improvement among major metros.
A buyer’s market few can use
“It’s a buyer’s market, but not many people can afford to buy,” said Chen Zhao, Redfin’s head of economics. “That could start to shift a bit, now that sale prices are closer to reflecting the shape of the market.”
Zhao said house hunters in most of the country should treat a listing price as “a starting point,” and suggested offering below asking and “negotiating for closing costs, repairs and maybe even mortgage-rate buydowns.” With “a big pool of inventory sitting on the market, buyers can afford to be picky,” she said.
Callie Kimmel, a Redfin Premier agent in Philadelphia, described buyers who are “nervous about rates, the economy, and everything they’re seeing in the news,” and who need “the house and the price to line up perfectly before they’ll make an offer.” Her advice to sellers: “price just below current market value from day one.” Otherwise, she said, “the home is likely to end up sitting on the market for a bit and selling for less than they hoped.” Move-in-ready homes in the most desirable neighborhoods remain the exception, she said; there, “sellers have the upper hand.”
The same affordability squeeze is showing up elsewhere in Redfin’s data, which this week found condo sellers outnumbering buyers by 123%. The near-term path depends heavily on rates. The October inflation report released the same morning kept a larger Federal Reserve rate hike on the table for December, which does little to suggest quick relief for borrowers paying above 7%.
Redfin’s metro figures cover the 50 most populous U.S. metros. All figures are seasonally adjusted except median sale prices and mortgage rates.
