U.S. housing inventory growth accelerates as sellers resist price cuts

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U.S. housing inventory growth

Highlights

Active U.S. housing inventory reached 183,500 homes in October, up 7.4% year over year, marking the fastest annual growth in eight months.
Newly pending sales fell 16.8% year over year in October, the biggest decline since August 2023 and the slowest October since 2018, as mortgage rates stayed high.
Typical U.S. monthly mortgage payments rose to $2,004 in October, up 12.8% from a year earlier and 4.8% from September, the largest one-month increase in four years.

Inventory buildup deepens October slowdown

As reported by CNBC, citing Realtor.com, active inventory in October reaches 183,500 homes, up 7.4% from a year earlier, marking the fastest annual growth in eight months. Active listings have been increasing every month since February, even though new listings fall 7.5% from October 2025.

The market is still adjusting after several years of unusually tight supply driven by the pandemic-era homebuying surge, when mortgage rates fell to record lows. National supply now stands just 6.6% below typical pre-pandemic levels, the narrowest gap since the pandemic.

Danielle Hale, chief economist at Realtor.com, says the market is cooling on both sides in different ways, with buyers stepping back as higher mortgage rates erode affordability while sellers list less often without a broad rise in delistings or price cuts. Just over 20% of sellers cut prices in October, roughly unchanged from both September and the same month last year, and there is no meaningful increase in delistings.

Affordability pressure weighs on sales outlook

Mortgage rates ease slightly from September to October, but they remain more than a full percentage point above year-earlier levels, continuing to weigh on sales activity. According to Zillow, newly pending sales, which reflect signed contracts rather than closings, drop 16.8% year over year in October, the biggest annual decline since August 2023 and the slowest October since 2018.

Home prices continue to rise despite the softer market. Zillow estimates the monthly mortgage payment on a typical U.S. home reaches $2,004 in October, assuming a 20% down payment and excluding taxes and insurance, up 12.8% from a year earlier and 4.8% from September, the largest one-month jump in four years.

Mischa Fisher, Zillow's chief economist, says November is shaping up for an even larger contraction, although he expects the pace of the slowdown to ease into the new year. He adds that rising inventory could create opportunities for buyers who can withstand affordability pressures and could support a stronger sales rebound next year if mortgage rates decline.

Our earlier article on UBS Global Wealth Management’s updated Fed outlook highlighted how persistent inflation could extend the tightening cycle, with additional rate hikes expected into 2027. We noted that markets quickly repriced toward a higher-for-longer path, implying elevated borrowing costs and tighter financial conditions that can weigh on rate-sensitive sectors such as housing.

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