Starter-home sales jumped 4.9 percent year-over-year in October as buyers benefited from more choices and modest price growth, according to a new report from Redfin. Mid-priced (up 0.7 percent) and high-priced (up 0.8 percent) home sales also rose from a year earlier after a long stretch of year-over-year declines.
Starter-home sales have been on an upward trend for more than a year, consistently outperforming the rest of the market through 2025 as buyers shift their focus to the most affordable homes available, according to Redfin’s report
Pending-sales data echoes this trend, with the starter tier seeing the biggest rise (up 5.5 percent), followed by smaller increases for mid-priced (up 1.4 percent) and high-priced (up 1.1 percent) homes.
“The starter-home market is a double-edged sword right now,” Redfin Head of Economic Research Chen Zhao said in a release. “Conditions are improving, with more listings and steadier prices, but many buyers are only turning to this tier because they have been priced out of higher tiers. That means sales at the low end of the market are relatively strong, but it also means that first-time buyers may find themselves competing with move-up or move-down buyers.”
Mortgage rates staying below 6.5 percent over the past few months is also helping to fuel the uptick in sales across all tiers, with mid- and high-priced homes edging into positive territory after months of year-over-year declines, according to Redfin’s report.
The increase in starter-home sales is not causing prices to spike. The typical starter home price rose 2 percent year-over year to $260,000 in October, the second-slowest growth in the past decade — trailing only April 2024 (up 1.8 percent), when mortgage rates were above 7.5 percent.
The median price of mid- and high-priced homes rose 1.8 percent and 3.1 percent respectively, also near decade-long lows for price growth.
Starter-home prices are rising modestly in part because there are a lot more of them on the market, according to Redfin. Active listings of starter homes rose 13 percent year-over-year in October, pushing inventory to its highest October level since 2016.
Inventory also grew in other price tiers, but not as quickly, according to Redfin. Active listings of mid-priced homes increased 9.5 percent from a year earlier to the highest October level since 2019, and high-priced homes rose 8.3 percent to the highest October level since 2020.
New listings of starter homes were up by 0.5 percent year-over-year, while new listings fell 1.7 percent in the mid-priced tier and 1.3 percent in the high-priced tier. That indicates that much of the overall inventory growth across the three price tiers is coming from homes lingering on the market, rather than a sudden surge of new sellers.
The typical starter home went under contract in 45 days in October, a week longer than a year earlier, according to Redfin. Mid-priced homes followed the same pattern, also taking 45 days (up by six days year-over-year), while high-priced homes took 49 days ( up by seven days year-over-year).
“The slower pace of the market has really changed buyer behavior,” Andrew Vallejo, Austin-based Redfin Premier real estate agent, said. “People aren’t racing to waive contingencies or outbid ten other offers. If a starter home isn’t priced perfectly, it can sit for a bit, and buyers know that. They feel more comfortable negotiating because they’re not worried about losing the home in 24 hours.”