Nationwide home-sale prices dropped year-over-year in October for the first time in over three years, while residential rents climbed over the same period as borrowing costs remained above 7 percent.
For American families weighing whether to buy or lease, these twin shifts mean lower asking prices are not translating into cheaper monthly payments. The median home-sale price slipped 0.1 percent to $389,601 during the four weeks ending October 25, according to real estate brokerage Redfin. Over that same stretch, sellers cut prices on 21.5 percent of listed homes, compared with 20.9 percent a year earlier.
Yet the typical weekly mortgage payment climbed 10.7 percent from a year earlier to $2,786 in the week ending October 25, setting the second-highest level on record. Freddie Mac reported that the average 30-year fixed-rate mortgage stood at 7.24 percent as of October 29. Pending home sales dropped 1.8 percent week-over-week on October 25, marking their lowest volume since 2021 and declining across all 50 of the largest metropolitan areas for three consecutive weeks.
High Borrowing Costs Squeeze First-Time Buyers
Joel Berner, senior economist at Realtor.com, said that falling prices, normalized market durations, and expanding inventory are nudging the broader housing market toward buyers. "Prices are falling, time on market is back to normal, and inventory continues to grow. The national market is tipping into buyers’ territory," Berner said.
However, buyers who depend on financing face steep hurdles. "With a growing cost of living, saving for a down payment becomes more difficult, so first-time buyers end up financing more of their purchase at higher rates," Berner stated, noting that entry-level inventory remains scarce. Redfin data showed new listings fell 0.6 percent in the week ending October 25, reaching their lowest level of the year.
Rents Rebound Across Key Metro Areas
With high mortgage obligations keeping households out of homeownership, rental demand is rebounding. Apartment List reported that the national median rent rose 0.1 percent to $1,384 in October, logging its first overall increase in three years. The national multifamily vacancy rate stood at 7 percent, reflecting a gradual reduction from peaks earlier in the year.
The pressure varies sharply across regions. West Coast rental hubs experienced rapid rent surges, led by San Francisco at 24.3 percent, Oakland at 16.5 percent, and Boise at 12 percent. By contrast, several large markets saw property prices drop: Seattle home-sale prices fell 5.1 percent alongside a 31.6 percent drop in pending sales, while San Jose dropped 4.9 percent and Austin decreased 4.6 percent. Rent declines in Austin moderated to 1.3 percent after falling 6.2 percent the prior year. Buyers can review their local housing data through regional brokerages and mortgage lenders before locking in financing terms.
