Sales of existing homes in the United States fell to the lowest level in more than 16 years in October, as rising mortgage rates and still-elevated house prices pushed potential buyers to the sidelines.
Home sales dropped 5.5% last month to a seasonally adjusted annual rate of 3.75 million units, the National Association of Realtors said on Thursday. That was the lowest level since August 2010, when sales were declining following the end of a homebuyers tax credit, and it was weaker than the 3.85 million pace economists polled by Reuters had forecast.
Sales plunged 8.8% on a year-over-year basis in October, the largest annual decrease since 2023, and the drop marked the steepest monthly decline since January. October was the third month in a row that the annual sales pace remained below 4 million, ending a three-year period in which sales had hovered near that mark.
The main culprit is the cost of borrowing. The 30-year fixed mortgage rate jumped above 7% in late August, rising to 7.40% by mid-September — its highest level in nearly three years — for a total rise of 142 basis points since the US and Israel attacked Iran at the end of February, according to data from mortgage finance agency Freddie Mac. October's sales largely reflect purchase contracts signed in September, when a selloff in the bond market sent mortgage rates soaring.
"Homebuying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023," said Lawrence Yun, the NAR's chief economist. Sales fell in all four major US regions, and across every price tier — even in the $1 million-and-up market that had previously proved resilient.
Paradoxically, prices have barely budged. The national median existing-home price rose 0.4% from a year earlier to $416,700, an all-time high for the month of October, according to NAR data. Sellers are holding firm even as buyers disappear, and the result is a market that is frozen rather than falling.
Inventory is rising even as sales fall. Existing housing inventory increased 1.3% to 1.59 million units, up 4.6% from a year ago, which translates into 5.1 months' supply — the highest level in 11 years. Condominium sales fell to the lowest level in records going back to 1999.
The housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows, and sales of previously owned homes were essentially flat last year, stuck at a 30-year low. Goldman Sachs economists forecast last month that there would be just 3.9 million existing-home sales in 2027, compared with well above 5 million before the pandemic.
The outlook offers little immediate relief. "With sales at a 16-year low, and the Fed poised to raise rates further, housing will remain under pressure for some time," Priscilla Thiagamoorthy, a senior economist at BMO Capital Markets, wrote in a note on Thursday. Traders have raised the probability of another quarter-point Federal Reserve rate hike in December to around 90% following this week's hot inflation data.
For millions of Americans, the numbers describe a market that has stopped working for ordinary buyers: homes are available, prices are near record highs, and the monthly cost of borrowing has put them out of reach. Until mortgage rates fall meaningfully, the housing market looks set to stay where it is — at its slowest pace in a generation.
Market figures in this report were checked at 07:20 PKT on 13 November 2026.
This post is market news information only, not financial advice.
