Home sales hit 16-year low in October amid record-high mortgage rates
Sales of built units fell to 3.75m in October, down by 8.8% from last year, with mortgage rates at nearly three-year high
US existing home sales reached a 16-year low during October as prospective buyers were discouraged by record-high mortgage rates and mounting Wednesday.
The National Association of Realtors (NAR) reported that sales of previously built homes fell to 3.75m in October, representing an 8.8% decline compared to the previous year. While the median sales price for existing homes saw a slight increase to $416,700, sales volume dropped across the Midwest, South, and West, though the Northeast remained stable.
Mortgage rates had been trending downward throughout 2024 and 2025, with the 30-year rate dipping below 6% for the first time in February 2026. However, rising inflation and increased interest rates linked to the Iran war have pushed these rates back to a nearly three-year high.
The 30-year mortgage rate, the most common choice for home loans, is currently hovering around 7.18%, nearing its 2023 peak of 7.79%. During the pandemic, average mortgage rates were just above 3%.
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” Lawrence Yun, chief economist at the NAR. “As a result, home sales fell to their lowest level since August 2010.”
Pending home sales, which track contracts signed prior to closing, hit their lowest levels in the history of the NAR in September, the same month the 30-year mortgage rate exceeded 7% for the first time in nearly two years.
Mortgage rates have been directly impacted by interest rate adjustments from the US Federal Reserve, which implemented its first rate hike since 2023 this past September. Rates are currently positioned in a range between 3.75% and 4%.
The central bank is prepared to increase rates again next month to address elevated inflation, which rose more than anticipated in October.
Concerns regarding affordability and the cost of living were significant factors in the midterm elections that resulted in Democrats maintaining control of Congress for the coming year. Census data indicates that the growth of median rent across the US has outpaced inflation. According to the same data, the US home-ownership rate has remained stagnant since 2021.
“I don’t think this is a new normal for home sales,” said Danielle Hale, chief economist at
