The record 43-day federal government shutdown that extended through all of October likely made a dent in sales of existing single-family houses and condos, but the number of closings still rose 1.2% from the previous month.
The number of seasonally adjusted sales in October was 4.1 million, the National Association of Realtors reported Thursday. Sales so far this year are slightly above last year’s pace, NAR chief economist Lawrence Yun said, although he said at the group’s annual conference last week that he expects roughly zero growth for the year as a whole.
Certain homebuyers, notably those taking out low-down-payment loans from the U.S. Department of Agriculture or insurance from the National Flood Insurance Program, likely saw their closings delayed because of the recent government shutdown. Yun recalled that during the previous shutdown in 2018-19, existing sales rose by more than 300,000 in the month after the funding lapse ended.
While Yun predicted at the conference that 2026 would be a better year, with sales expected to rise 14%, he cautioned that the supply of houses available for purchase is still lower than it needs to be. Moreover, even though mortgage rates have come down close to 6%, they might need to get below that level to return the market to a normal level. He said on Thursday that the last time the market was normal was in 2019, before the pandemic, when annual sales stood at 5.2 million.
“To get 1 million more sales requires drastically more supply — we’re not seeing that,” he said. “We also need a much more meaningful decline in rates. If they could get to 5.9% or 5.8%, that could psychologically [affect] buyers.”
Yun recalled that earlier this year, the NAR calculated that if rates fell to 6%, it would lead to an additional 500,000 people buying houses. To reach the 5 million “normal” level in sales will require another half million more buyers, he said.
The inventory of homes for sale in October was 1.52 million, down slightly from the previous month. There’s currently a 4.4-month supply of houses available, down from 4.5 months in September. The supply is up 11% from one year ago.
Sales jump in Midwest
On a regional basis, the Midwest — where housing is much more affordable than elsewhere in the U.S., with a $319,500 median sales price — saw a 5.3% hike in sales month over month in October. Other regions saw little gain: The South registered a 0.5% increase, while sales in the Northeast were flat. They fell 1.3% in the West.
Since October 2024, sales have risen 4.3% in the Northeast, 2.8% in the South and 2.1% in the Midwest. They dropped over the past year in the West by 2.6%.
First-time buyers accounted for 32% of sales in October, up from 27% a year ago and 30% in September. Yun said the number is encouraging, though it’s hard to tell at this point whether it’s a sign of a trend or just a one-month shift.
“Housing affordability is modestly improving, because wage growth is outpacing home price growth and mortgage rates are down a bit,” Yun said. “I think first-time buyers are saying, if it fits my budget, I want to be a homeowner.”