WASHINGTON–Monthly mortgage payments rose nearly 13% in October even as home prices barely increased, adding to affordability pressures and contributing to a sharp slowdown in homebuying activity, according to new data.
National Mortgage Professional reported that Zillow’s October Market Report found the typical monthly principal-and-interest payment reached $2,004, up 12.8% from a year earlier and 4.8% from September. The estimate assumes a 20% down payment and excludes taxes and insurance.
The typical U.S. home value was $364,812, up just 0.7% from a year earlier and down 0.6% from September. Mortgage rates, meanwhile, averaged 7.33% in October, compared with 6.86% in September, based on Freddie Mac data cited by Zillow.
Zillow estimated that buyers using FHA financing with a 5% down payment faced an 11.8% annual increase in monthly payments.
Purchase Activity Weakens
Newly pending home listings fell 16.8% from October 2025, the steepest annual decline since August 2023 and the weakest October since 2018, according to the report. Pending listings also declined 9.1% from September.
Zillow preliminarily estimated that 304,105 existing homes sold in October, down 8.7% from a year earlier and 5.4% from September. Because completed sales generally reflect contracts signed earlier, the decline in new pending listings suggests additional weakness ahead.
Zillow Chief Economist Mischa Fisher expects the annual decline in sales activity to be greater in November than in October before the slowdown begins to moderate in early 2027, National Mortgage Professional reported.
Other industry indicators point to similar weakness. Redfin reported a 16.4% annual decline in pending sales during the four weeks ending Nov. 1, while the Mortgage Bankers Association said purchase mortgage applications fell 2% in the week ending Oct. 30 and were down 19% from a year earlier.
More Inventory Gives Buyers Leverage
About 1.4 million homes were listed for sale nationwide in October, up 3.4% from a year earlier, Zillow found. New listings declined 4.2% to 328,328.
Homes took a median of 31 days to go pending, two days longer than a year earlier. The share of listings with price reductions was 26.5%, compared with 26.9% in October 2025.
National Mortgage Professional noted that additional inventory and longer selling times could give qualified buyers more negotiating room on prices, closing costs and temporary mortgage rate buydowns. But those concessions may not fully offset higher borrowing costs.
Zillow expects sales declines to moderate heading into 2027, with lower mortgage rates potentially helping revive demand.
