Guide · Markets
Existing Home Sales Explained: Months' Supply and Prices
Existing-home sales count closed purchases of previously owned homes each month. In October 2026 they fell to a 3.75 million pace, the lowest since 2010.
On November 12, 2026, the National Association of Realtors reported that sales of previously owned US homes fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, the slowest pace since August 2010. In the same release, the number of homes for sale rose to 1.59 million, or 5.1 months of supply, the highest since November 2015, while the median price was still 0.4% higher than a year earlier at $416,700. One report, three numbers that told slightly different stories. Knowing how to read each of them is what this guide is about.
Existing-home sales count closings of single-family homes, townhouses, condominiums and co-ops that have been lived in before. NAR publishes them around the third or fourth week of each month for the month before. The headline is an annual rate: October's 3.75 million does not mean 3.75 million homes changed hands in October, but that the month's sales, adjusted for normal seasonal patterns, would add up to that over a full year. Because a sale is counted at closing, the figure mostly reflects contracts signed one or two months earlier.
Existing homes are about nine in ten of all US home sales, which makes this the broadest measure of the housing market's activity. New-home sales, published by the Census Bureau, are smaller but count a sale when the contract is signed, so they turn earlier. Pending home sales, NAR's index of signed contracts on existing homes, sit in between and are the best short-term predictor of next month's existing-home figure.
Months' supply is the number most professionals look at first. It divides the homes listed for sale by the monthly pace of sales and answers one question: how long would it take to sell everything on the market if no new listings appeared? Below about four months, buyers compete and prices tend to rise; between four and six is usually seen as balanced; above six, sellers compete and prices tend to fall. The ratio can rise for two reasons, more listings or fewer sales, and October 2026 had both.
The median price needs care. It is the price in the middle of all homes sold that month, so it moves with the mix of what sells: a month with more sales of expensive homes lifts the median even if no single home gained value. It is also seasonal, peaking in early summer, which is why it is usually compared with the same month a year earlier rather than with the month before. Repeat-sales indexes such as Case-Shiller, which track the same homes over time, are better for measuring true price change but arrive two months later.
For markets, the report matters through rates. Housing is the part of the economy most sensitive to mortgage costs, and existing-home sales react to them within a few months, so a weak report tells investors that tighter policy is already biting. Home builders, mortgage lenders, building-product makers and home-improvement retailers move on it. The checklist is short: compare the sales pace with the forecast, look at months' supply to judge where prices are heading, read the median price against a year ago, and check pending sales for what comes next.