Sales of previously owned homes across the United States fell to their lowest level in more than 16 years in October, as climbing mortgage rates kept buyers on the sidelines despite already-elevated prices.
The National Association of Realtors reported Thursday that existing-home sales dropped 5.5 percent from September, landing at a seasonally adjusted annual rate of 3.75 million. That was a steeper decline than the 3.8 percent drop economists surveyed by The Wall Street Journal had forecast, and it marked the weakest sales pace since August 2010, when the market was still recovering from the financial crisis.
The monthly drop was the largest since January, and sales were down 8.8 percent compared with a year earlier — the biggest annual decline since 2023.
Borrowing costs are the main culprit. The average rate on a 30-year fixed mortgage climbed to 7.33 percent in October, up from 6.86 percent in September and 6.25 percent a year earlier, according to Freddie Mac figures cited by NAR.
Because October’s sales figures largely reflect contracts signed in September, the full effect of last month’s rate increase has likely yet to show up in the data, raising concerns about further softness ahead.
Home prices have not eased to compensate. The national median existing-home price rose 0.4 percent from a year earlier to $416,700.
Available inventory grew even as sales fell. There were 1.59 million homes on the market at the end of October, up 1.3 percent from September and 4.6 percent from a year earlier. That amounts to 5.1 months of supply at the current sales pace, up from 4.7 months in September and 4.4 months a year earlier.
Regional and price breakdowns
The slowdown hit three of the four major U.S. regions. The West saw the steepest decline, down 9.7 percent, followed by a 6.5 percent drop in the South and a 3.2 percent decline in the Midwest. Sales in the Northeast held steady.
The weakness cut across price points. Supplemental NAR data showed single-family home sales below year-earlier levels in every price category, including a 12.2 percent drop for homes priced between $500,000 and $750,000 and a 6.6 percent decline for homes selling for more than $1 million.
Distressed sales — foreclosures and short sales — remained a small share of the market, accounting for just 2 percent of transactions.
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