Homebuying Activity Surges in October

October saw improved affordability in the housing market, bringing both sellers and buyers back to the table. According to housing market platform Zillow, the average 30-year mortgage rate eased to 6.25%, reaching the lowest monthly average in more than a year while home prices remained steady. These factors helped reduce mortgage payments by 1.8% compared with last October and also helped to improve homebuyer activity. Both new listings and pending sales grew by 5% from the prior year.

Some metros recorded greater sales activity than others. Tampa, Fla., saw the largest increase in both listings and pending sales. Other markets with increased listings include Raleigh, N.C., Orlando, Fla., Columbus, Ohio, and Louisville, Ky. Meanwhile, the metros seeing the biggest increase in pending sales include Boston, Orlando, Fla., Jacksonville, Fla., and Miami.

While the recent dip in rates helped to momentarily bring buyers back to the market, affordability remains a concern for buyers across the U.S.

Paired with rising incomes, this has improved affordability for new home buyers to three-year highs — though costs are still a significant challenge. The median-earning household would spend 32.9% of its income on a mortgage on the typical home, given a 20% down payment. That’s the smallest share of income needed since August 2022. However, it’s still higher than the 30% threshold at which housing is considered a financial burden, and a 20% down payment is a serious hurdle at more than $72,000.