US Existing-Home Sales Fall to Lowest Level Since 2010

Sales of previously owned US homes fell to their lowest level in more than 16 years in October, as mortgage rates above 7% kept buyers on the sidelines.

Sales dropped 5.5% from September to a seasonally adjusted annual rate of 3.75 million homes, the National Association of Realtors said. That was the lowest rate since August 2010 and an 8.8% decline from October a year earlier. Sales fell from the previous month in the Midwest, South and West and held steady in the Northeast. All four regions recorded year-over-year declines.

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

“It is just a tough market for buyers and sellers,” Yun said, according to Al Jazeera.

The Guardian reported that the median price of an existing home sold in October rose slightly to $416,700. Higher borrowing costs have added to the expense of buying: The average 30-year fixed mortgage rate was 7.33% in October, up from 6.86% in September and 6.25% a year earlier, according to Freddie Mac figures cited by Al Jazeera. The rate averaged 7.18% last week, down from 7.24% the week before. During the pandemic, average mortgage rates were just above 3%, The Guardian reported.

The sales figures count completed transactions, which means October’s results likely reflect contracts signed in August and September, according to Al Jazeera. The Guardian reported that pending sales — contracts signed but not yet closed — fell in September to the lowest level in the association’s history.

First-time buyers accounted for 29% of October purchases, down from 31% in September and 32% a year earlier, the association said, according to Al Jazeera. Historically, they have made up closer to 40% of sales.

Mortgage rates had fallen below 6% in February before rising again as the war with Iran pushed up oil prices and inflation, the outlets reported. The Guardian reported that the Federal Reserve raised interest rates in September for the first time since 2023, bringing its benchmark range to 3.75% to 4%. Al Jazeera noted that mortgage rates are also influenced by bond-market expectations and generally track the direction of the 10-year Treasury yield.

The housing market has been in a slump since 2022, and sales of previously occupied homes were essentially flat last year at a 30-year low, according to Al Jazeera. Yun expects this year’s sales to finish below 2025 levels, the outlet reported.

Danielle Hale, chief economist at Realtor.com, cautioned against treating the decline as permanent. “I don’t think this is a new normal for home sales,” she told The Guardian, citing a sudden shift in financial conditions, uncertainty before the elections and the housing market’s usual seasonal slowdown.