U.S. existing-home sales fall to 16-year low in October

U.S. existing-home sales fell to 3.75 million units in October, down 8.8% from a year earlier and the lowest in 16 years, the National Association of Realtors reported Wednesday.

NAR's figures came amid record-high mortgage rates and rising inflation, which the report said kept buyers away. The median price of an existing home edged up to $416,700, according to the association.

The 30-year mortgage rate, the most commonly used rate in home loans, hovered around 7.18% as sales weakened. Market-rate data cited alongside the NAR release put that figure not far below its 2023 high of 7.79%, while average mortgage rates during the pandemic were just above 3%.

Lawrence Yun, chief economist at the NAR, said: “Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023. As a result, home sales fell to their lowest level since August 2010.”

NAR data showed declines in existing-home sales across the Midwest, South and West. Sales in the Northeast held steady, according to the association's regional breakdown.

What pushed mortgage rates back above 7%?

Mortgage rates declined steadily in 2024 and 2025, and the 30-year rate fell below 6% for the first time in February 2026, according to the rate history cited with NAR data. Rising inflation and higher interest rates amid the Iran war reversed that progress, pushing the 30-year rate to a nearly three-year high.

The US Federal Reserve's September increase was its first rate hike since 2023, according to the report. Its target range now stands at 3.75% to 4%, and mortgage rates have moved directly with the central bank's policy changes.

The report said the Federal Reserve is poised to raise rates again next month to combat heightened inflation. Inflation rose more than expected in October, adding pressure for another increase.

How weak is the housing pipeline?

Pending home sales reached the lowest levels in the NAR's history in September, according to the association. The NAR's measure counts contracts signed before closing, capturing home transactions that have not yet completed.

September's record low came in the same month the 30-year mortgage rate topped 7% for the first time in nearly two years, according to the rate data. The NAR count covers contracts signed before closing rather than completed sales.

What do affordability data show?

Affordability and cost-of-living concerns played an outsized role in the midterm elections that gave Democrats control of Congress next year, the report said. The latest U.S. Census data showed growth in median rent across the country outpacing inflation.

The same Census data showed the U.S. homeownership rate stagnating since 2021. Danielle Hale, chief economist at Realtor.com, said the October decline reflected an abrupt financial shift and pre-election uncertainty rather than a new baseline for housing sales.

“I don’t think this is a new normal for home sales,” said Danielle Hale, chief economist at Realtor.com. “Instead, it reflects a perfect storm of an abrupt shift in the financial environment and large uncertainties in the pre-election period for both policy and the economy just as the housing market usually slows for the season.”

The Federal Reserve's next decision now carries the clearest near-term risk for buyers and sellers. The report said the central bank remained poised for another increase as inflation rose more than expected, keeping mortgage-rate pressure in focus.

With sales at an August 2010 low, pending contracts at a NAR-record low and the 30-year rate near 7.18%, any sustained recovery depends on cheaper financing and a cooling in the cost pressures identified by NAR and Realtor.com. The next readings on rates, inflation and pending contracts will set the near-term pace for transactions.