Home Sales Perked Up in October. Don’t Call It a Comeback—Yet.

(Joe Raedle/Getty Images)

Key Points

• Sales of previously owned homes increased 1.2% to 4.1 million in October, reaching the highest level since February.
• The median existing home price rose to $415,200 in October, marking a 2.1% increase from the previous year.
• The National Association of Realtors forecasts a 14% increase in existing home sales in 2026 as mortgage rates decline.

Home sales in October rose to their highest level since February, new data show. It’s a bit of good news for a sluggish housing market, if not the rebound the industry is waiting for.

Sales of previously owned homes increased for the second month in a row, according to data released Thursday by the National Association of Realtors. Seasonally adjusted annual sales rose 1.2% from the month before 4.1 million, the highest level since February’s 4.27 million.

“Home sales increased in October even with the government shutdown due to home buyers taking advantage of lower mortgage rates,” Lawrence Yun, the National Association of Realtors’ chief economist, said in a statement.

It was a bigger boost than expected: Consensus had anticipated a more modest rise to roughly 4.09 million. Home prices kept rising in October, the data show. The median existing home sold for $415,200, up 2.1% from one year prior.

But investors shouldn’t read too much into October’s pickup in sales, Selma Hepp, the chief economist at real estate technology provider Cotality, wrote in Wednesday commentary. “Even if the data shows a modest year-over-year increase, I would view it as a cautiously optimistic signal rather than a definitive turning point,” Hepp wrote.

Though mortgage rates have fallen—to a recent 6.24% according to Freddie Mac, from around 7% earlier this year—they remain high relative to historic norms, Hepp said. “Affordability challenges persist, and the real momentum in housing demand will depend on improvements in consumer confidence and labor market strength.”

The trade group expects home sales to pick up significantly next year: The Realtors group earlier this month called for a 14% increase in sales of previously owned homes in 2026 as mortgage rates decline to around 6%.

But even that increase wouldn’t bring sales back to normal levels, Yun noted Thursday. “I don’t think we will get there next year because we need one million more home sales to get us back to normal,” Yun said. “I’m only looking at roughly half a million additional sales boost next year, assuming I’m right.”

The home sales reading is “just one piece of a much larger puzzle,” Cotality’s Hepp said Wednesday. “We’re still far from prepandemic norms, and a sustained recovery will require consistent progress across multiple indicators.”

Write to Shaina Mishkin at shaina.mishkin@dowjones.com