Key Takeaways
- Existing home sales fell 8.7% year over year in October to 304,105 homes, and newly pending listings fell 16.8% year over year, the biggest annual drop since August 2023 and the slowest October since 2018, according to the Zillow October Market Report released November 5, 2026.
- The typical monthly mortgage payment jumped to $2,004, up 12.8% from a year earlier and up 4.8% from September, the biggest one-month jump in four years, while the typical home value slipped 0.6% in the month to $364,812.
- Rents moved the other way, up 2.9% year over year to $1,913, the strongest annual gain in 19 months.
The most useful fact in this report is not the October sales drop. It is the timing behind it.
Zillow says October closings largely reflect deals agreed to in September, when mortgage rates were below 7% for much of the month. The sharper 16.8% fall in newly pending listings is the leading indicator, and it points to November closings that will look even weaker, even if conditions have already started to ease.
Sales Fell, and the Pipeline Says November Will Look Worse
Zillow’s October Market Report says mortgage rates entrenched themselves above 7% and home sales slowed sharply.
The preliminary sales count was 304,105 homes in October. That was 8.7% lower than a year earlier and down 5.4% from September, and Zillow notes the figures will be revised mid-month.
| October 2026 measure | Result | Change |
|---|---|---|
| Existing home sales | 304,105 homes | Down 8.7% year over year, down 5.4% from September |
| Newly pending listings | Slowest October since 2018 | Down 16.8% year over year, down 9.1% from September |
| Typical home value (ZHVI) | $364,812 | Down 0.6% in the month, up 0.7% year over year |
| Typical monthly mortgage payment | $2,004 | Up 12.8% year over year, up 4.8% from September |
| Homes for sale | 1.4 million | Up 3.4% year over year, up 0.4% from September |
| New for-sale listings | 328,328 | Down 4.2% year over year, down 4.4% from September |
| Typical rent (ZORI) | $1,913 | Up 2.9% year over year, flat from September |
“The acute sting of suddenly higher mortgage rates is having the unfortunate effect on the housing market that last month’s pending sales data foretold,” said Mischa Fisher, Zillow chief economist.
“November is shaping up to have an even larger contraction, but the silver lining is that next month is likely going to be the worst of it. I expect the pace of the slowdown to ease into the new year. There are deals to be had for buyers able to brave the affordability headwinds in the coming months, and the continued inventory buildup means there is a lot of upside for sales into next year if we get rate relief.”
That forecast matters for how you read the next headline. A weak November sales print would not, on its own, prove the market got worse in November. It would mostly prove October buyers pulled back.
Rates, Not Prices, Drove the Payment Shock
Zillow is clear about the cause. The rise in mortgage costs is almost exclusively due to higher mortgage rates.
Home values fell 0.6% in October and are just 0.7% higher than a year earlier. Mortgage rates averaged 7.33% in October, according to Freddie Mac figures cited by Zillow, up from 6.86% in September.
- Payment at 20% down: $2,004 a month, excluding taxes and insurance, up 12.8% year over year.
- Payment jump in one month: Up 4.8% from September, the biggest one-month jump in four years.
- Low-down-payment buyers: For a buyer putting 5% down with an FHA loan, the year-over-year rise was similar, at 11.8%.
- Income needed: A household earning the median income would spend 34.7% of its income on the typical payment including taxes, maintenance and insurance, up from 32.7% a year earlier and 33.5% in September.
- Time to go pending: A median of 31 days, two days longer than a year earlier and two days longer than September.
- Price cuts: 26.5% of listings had a price cut in October, down from 26.9% a year earlier and 27.3% in September.
Inventory is still building, just slowly. There were 1.4 million homes for sale, up 3.4% year over year, while new listings fell.
That split matches the for-sale picture in Realtor.com’s October report, where active listings rose 7.4% as new listings fell 7.5%. Two different data sets agree on the shape: the stock of homes is growing because homes sit longer, not because sellers are rushing in.
Buyer demand is also still rate-sensitive in the weekly data. Mortgage applications fell 1.2% in the week ending October 30, even as the conforming rate eased, which is why a small rate dip alone has not revived pending sales yet.
What Beginner Investors Should Do With a Lagging Indicator
The rental side is diverging from the for-sale side, and that is the second fresh insight. Rent growth has now accelerated for seven straight months.
The typical rent is $1,913, up 2.9% year over year, the strongest annual gain in the past 19 months. A median-income household would spend 26% of its income on the typical rent, unchanged from a year earlier and from September, while 40.4% of rental listings offered a concession, up from 38.7% a year earlier.
That combination, rising headline rent with more concessions, rewards careful local checking. It also connects to rent growth turning positive for the first time in over three years in the Apartment List data, so the firming trend is not a one-source story.
- Do not panic at the November sales headline. Pending listings already told you it was coming. Judge November by new pending activity and rate moves, not by closings that reflect October decisions.
- Underwrite the payment, not the price. Values were nearly flat year over year, yet the payment rose 12.8%. Run every deal at the rate you can actually lock, and stress it above 7.33%, the October average.
- Use the extra time on market. At a median 31 days to pending, two days slower than last year, buyers have more room to inspect, negotiate repairs, and ask for concessions than they had in a fast market.
- Check concessions before you copy a rent. With 40.4% of rental listings offering a concession, the advertised rent and the effective rent can differ. Price from signed leases near you, not from the highest listing.
- Watch for the turn Fisher described. If the pace of the slowdown eases into the new year and inventory keeps building, buyers who stayed ready, with financing lined up and a target list priced, will be first in line if rate relief arrives.
The bottom line: October was a rate shock, not a price collapse. Sales fell 8.7%, pending sales fell 16.8%, and the payment on a nearly flat home value still jumped 12.8% in a year. Treat November closings as old news, watch pending sales for the real turn, and let the firmer rent trend support only deals that already work at today’s payment.
Data: Zillow October Market Report, released November 5, 2026. Sales figures are Zillow’s preliminary sales count nowcast and will be revised mid-month. The Zillow November Market Report is expected December 4, 2026.
