Home Buyers Face A $2,004 Monthly Payment, Up 12.8% In A Year, As Newly Pending Listings Fall 16.8% In The Steepest Drop Since 2023

If you have been waiting for the housing market to cool off enough to make buying a home easy, October’s numbers are not going to cheer you up. Zillow’s latest market report shows a typical monthly mortgage payment of $2,004, up 12.8% in a year, while the number of deals getting done keeps shrinking.

Aerial view of rows of houses along neighborhood streets.

That payment assumes 20% down and excludes taxes and insurance. It is simply the principal and interest on a typical home, and it has climbed even though the typical home value has barely moved.

Newly Pending Listings Fell 16.8%, The Steepest Drop Since August 2023

Here is the headline from the report. Newly pending listings, meaning homes that just went under contract, fell 16.8% from a year earlier.

Zillow calls that the steepest annual drop since August 2023, and it makes this the slowest October for new contracts since 2018. In plain English, far fewer buyers signed on the dotted line.

Zillow’s preliminary count has 304,105 homes sold in October, down 8.7% from a year ago. The company says the figure will be revised later, but the direction is clear.

The Rate Jumped To 7.33% And The Payment Followed

The reason is not mysterious. Freddie Mac’s average mortgage rate was 7.33% in October, up from 6.86% in September.

Half a point does not sound like much, but it is a lot when you borrow hundreds of thousands of dollars. It added to that $2,004 payment, which rose 4.8% in a single month.

A median-income household would now spend 34.7% of its income on the typical home payment, counting taxes, maintenance and insurance. A year ago that share was 32.7%.

Put another way, the average family is handing over about two more cents of every income dollar than it was last fall just to hold the same house.

Prices Are Flat, So Why Does Everything Feel More Expensive?

The typical home value stands at $364,812. That is up only 0.7% from a year ago and down 0.6% from September.

If prices barely move, the pain is in the financing. A buyer today pays about the same sticker price as last year but a much bigger monthly bill.

Renters are not getting a break either. The typical rent is $1,913, up 2.9% from a year ago, which is the strongest annual gain in 19 months. Zillow says rent growth has now accelerated for seven months in a row.

Sellers Are Cutting Prices And Homes Are Sitting Longer

Active inventory is about 1.4 million homes, up 3.4% from last year. More choice should help buyers, and it does, a little.

Of those listings, 26.5% had a price cut. Homes took a median of 31 days to go pending, two days longer than a year earlier.

Rental landlords are sweetening deals too. Zillow says 40.4% of rental listings now carry a concession, such as a free month, up from 38.7% a year earlier.

New listings were 328,328, down 4.2% from last year. Many owners with low-rate mortgages are staying put rather than trade a cheap loan for a pricey one.

Compared with a year ago, the share of listings with a price cut is a touch lower than the 26.9% then, so sellers are not panicking. They are meeting a cautious buyer halfway.

Zillow expects November to be the low point for sales. The company’s next report is due on December 4.

What A Smart Buyer Or Seller Can Do While The Market Stalls

If you are a buyer, run your own numbers instead of trusting the headline rate. Ask lenders for quotes on the same day, and compare the cost of points against a slightly higher rate.

Check what the total monthly bill will be, including property taxes, insurance and repairs. A good rule of thumb is to keep the full housing payment comfortably below a third of your income, and many families find that tight.

If you see a house that has been on the market longer than a month and has already cut its price, you may have room to negotiate. Ask the seller to pay closing costs or buy down your rate instead of cutting the price again.

If you are a seller, price it correctly from day one. In a market where more than a quarter of listings have a cut, the overpriced house is the one that sits.

Get the house ready before it goes live. A fresh coat of neutral paint, clean gutters and a tidy yard cost little compared to a price drop.

If you are not moving at all, there is good news in the numbers. Your payment is fixed, and a lower sales count does not hurt a home you are not selling.

For renters thinking of buying, do not let the monthly payment alone decide. Your rent is $1,913 for a typical place, and a typical mortgage payment is $2,004 before taxes and insurance, so the true gap is wider than it looks.

Keep your savings steady, pay down high-interest debt and keep your credit score healthy. When rates do ease, you will be the buyer who is ready to move.

You can see the figures yourself in Zillow’s market research.

Willow and Hearth