Home prices dropping on a yearly basis is a headline Redfin has not been able to write since 2023. The brokerage’s October 2026 housing report puts the U.S. median sale price at $388,634, down 0.4% from a year earlier. Redfin says it is the first annual decline since May 2023, and it comes only two months after prices were up 2.5% year over year.
The drop is small, but the activity behind it is weak. Pending sales fell to their lowest level since 2013 outside of April 2020. Active listings reached the highest count since early 2020. Redfin calls it a buyer’s market, with a caveat about affordability. This brief covers the numbers and what they mean for buyers and sellers.
The October numbers behind home prices dropping
Redfin’s report covers sales in October 2026. The figures below are from the company’s release, and each comparison is to the prior month or the prior year as noted.
| Measure | October 2026 | Month over month | Year over year |
|---|---|---|---|
| Median sale price | $388,634 | Not given | -0.4% |
| Pending sales | 300,430 | -3.6% | -15.1% |
| Closed sales | 274,987 | -2.1% | -6.7% |
| New listings | 372,431 | -1% | -3.9% |
| Active listings | 1,526,984 | +0.9% | +2% |
Redfin adds context to the table:
- Pending sales were the lowest since 2013, excluding April 2020.
- Closed sales were the lowest since December 2023.
- New listings were the lowest in more than two years.
- Active listings were the highest since early 2020.
- Existing home sales ran at a seasonally adjusted annual rate of 4,090,233, with 4.3 months of supply and 50 median days on market.
Why home prices are dropping: mortgage rates and buyer pullback
The report also gives the financing backdrop, the most likely pressure on buyers:
- The 30-year mortgage rate averaged 7.33% in October, according to Redfin.
- That is up 0.47 percentage points from September and up 1.08 points from a year earlier.
- A higher rate raises the monthly payment on a given price. Some buyers drop out, and others negotiate harder.
- Redfin does not say rates alone explain the decline. The report treats it as one part of a broader slowdown.
The Federal Reserve’s latest decision did not signal relief. On October 28 the central bank held its target range at 3-3/4 to 4 percent on a 10-2 vote. Two members preferred a quarter-point increase, and the statement said inflation remains elevated. Mortgage rates follow the bond market rather than the Fed directly, so the policy rate is context, not the cause. Earlier Jolt Journal coverage explains what the October hold means for savings, cards and mortgages.
Signs of a buyer’s market as home prices dropping spreads
Redfin’s data shows sellers giving ground, which is how home prices dropping shows up at the closing table. The company reports that 61% of homes sold below their original list price in October, and that the average sale price was 96.1% of the original list price. It also says 36% of October sales had at least one price cut, the highest share in its records, and 14.9% of pending sales fell out of contract.
- Price cuts are common. More than a third of sold homes had a reduction before the sale closed.
- Deals are failing. Roughly one in seven pending sales did not reach closing.
- Inventory is building slowly. Active listings are up only 2% from a year ago, because new listings are also down.
Chen Zhao, Redfin’s head of economics, said in the release: “It’s a buyer’s market, but not many people can afford to buy.” That sentence captures the split between market power on paper and cost in practice.
Where home prices dropping is most visible by metro
The national figure hides large regional differences. Among the 50 largest metro areas Redfin tracks, annual price changes ran in both directions:
| Metro | Annual price change |
|---|---|
| Austin | -6.5% |
| Seattle | -5.1% |
| Nashville | -4.9% |
| New York | +4.4% |
| Pittsburgh | +6.5% |
| New Brunswick, New Jersey | +7.7% |
| San Francisco | +16.8% |
Pending sales declined in every major metro in the report: Seattle fell 28.7%, San Diego 26.6% and Denver 24.2%. A market can show rising prices and falling activity at once, as several metros above do.
What Redfin suggests for buyers and sellers
Redfin’s advice in the release, by group:
- Buyers: offer below the asking price, and negotiate closing costs, repairs and rate buydowns. A rate buydown is a payment from the seller or builder that lowers the buyer’s mortgage rate for a period.
- Sellers: price the home just below what it is worth. Redfin’s own data shows why: 61% of homes sold below their original list price in October.
The Jolt Journal adds its own, separate suggestions. With home prices dropping, buyers may want to ask a lender whether a rate lock is available, and the site’s mortgage rate lock guide explains the options. Readers following the broader price trend can compare Redfin’s figure with the Case-Shiller index for August, which uses a different method and lags by several months. The site also tracks the 30-year mortgage rate, which matters as much to monthly payments as the sale price does.
Reading one month of home prices dropping carefully
One month of home prices dropping year over year does not make a trend. Median prices shift with the mix of homes that sell, and a decline of 0.4% could turn positive in a later month.
Other indicators point the same way, including the sharp fall in pending sales and the record share of price cuts. Still, one measure from one brokerage is not a forecast. Redfin, Case-Shiller and government sources use different methods, so they can show different numbers for the same month.
Editor’s take
Editor’s take: the 0.4% decline matters less as a price signal than as evidence that the market has hit a wall at current rates. Sellers are conceding on price, buyers are scarce, and volume is at multi-year lows. Home prices dropping does not make buying easier by itself. At a 7.33% mortgage rate, the monthly payment, not the sticker price, decides whether a purchase works.
This article is for general information, based on Redfin’s published data as of November 12, 2026. It is not financial or real estate advice. Figures may be revised, and local conditions differ.
