October '25 Market Update

What’s Happening in the Bay Area Real Estate Market

The Federal Reserve just announced a quarter-point rate cut, marking the beginning of what’s expected to be a new rate-cutting cycle. Even more exciting? Fed Chairman Jerome Powell hinted that two more cuts may come before the end of the year — a signal that the era of higher borrowing costs might finally be easing.

For the housing market, this is big news. After a long stretch of sluggish activity, these rate cuts could help unlock more movement from both buyers and sellers.

Affordability Still a Major Challenge

While mortgage rates are beginning to ease, housing affordability remains a top concern. Many markets across the U.S. have held onto their pandemic-era price gains, leaving would-be buyers still facing steep costs.

Some buyers worry that lower rates could spark renewed demand — potentially pushing home prices even higher. On the other hand, homeowners could see their equity climb if falling rates fuel another wave of buyer activity, similar to the boom of 2020–2022.

Inventory on the Rise

We’re also seeing a steady increase in housing inventory nationwide. Compared to last year, there are nearly 12% more homes on the market, and about 5% more new listings.

This growth shows that many buyers are waiting on the sidelines, hoping for even better opportunities once mortgage rates fall further. For now, sellers face a bit more competition — but that could shift quickly as rates continue to drop.

A Setup for a Busy 2026

Looking ahead, the current mix of growing inventory and falling interest rates could make for a fascinating 2026 market. As we move through the quieter winter months, all eyes are on what could be a fast-paced spring season next year For now, staying informed — and ready — will be key.