US home sales fall to 16-year low as mortgage rates climb
Mortgage rates near 7 percent and rising inflation kept buyers away. Pending sales also reached their lowest level in the National Association of Realtors' records.
Key points
- US existing home sales fell to a 16-year low in October, according to the National Association of Realtors
- Sales of previously built homes reached 3.75 million, down 8.8% from a year earlier
- The 30-year mortgage rate is near 7.18%, close to its 2023 high of 7.79%
- The Federal Reserve raised rates in September and is expected to raise them again next month
US sales of existing homes fell to their lowest level in 16 years in October, according to figures from the National Association of Realtors (NAR). The data was released on Wednesday and reported by The Guardian. Buyers were pulled back by mortgage borrowing costs that have climbed sharply again, alongside rising inflation.
Sales of previously built homes reached 3.75 million in October. That was 8.8% lower than a year earlier. The median price of an existing home edged up to $416,700.
Where sales fell
Sales dropped in the Midwest, the South and the West. The Northeast was the only region where sales held steady.
Lawrence Yun, chief economist at the NAR, said home buying has become difficult because mortgage rates have reached their highest levels since 2000, apart from a single month in 2023. He added that home sales had fallen to their lowest point since August 2010.
Mortgage rates reverse course
Mortgage rates had eased through 2024 and 2025. The 30-year rate fell under 6% in February 2026, the first time it had done so. Rising inflation and higher interest rates linked to the Iran war then pushed rates back toward a near three-year high.
The 30-year rate now sits at about 7.18%, close to its 2023 peak of 7.79%. During the pandemic, average rates were just above 3%.
The Federal Reserve raised its benchmark rate in September for the first time since 2023. The rate now sits between 3.75% and 4%. Inflation rose more than expected in October, and the central bank is widely expected to lift rates again next month.
Signs of a wider slowdown
Pending home sales, which count contracts signed but not yet closed, hit their lowest level in the NAR’s records in September. That was the same month the 30-year rate rose above 7% for the first time in almost two years.
Danielle Hale, chief economist at Realtor.com, said she does not see the slump as a new normal. She described it as a mix of a sudden change in financial conditions and wide uncertainty before the election, at a time when housing activity typically cools for the season.
Affordability and the wider market
Housing costs were a major issue in the midterm elections, which gave Democrats control of Congress from next year. Census data cited in the reports showed median rent growth outpacing inflation. The home-ownership rate has been flat since 2021.
The reports do not say when mortgage rates are likely to peak. They also do not confirm how long the slowdown in sales will last. Buyers, sellers and lenders will be watching the Fed’s next decision and the inflation data that feeds into it.
Frequently asked questions
Why did US home sales fall in October?
According to the National Association of Realtors, buyers were discouraged by high mortgage rates and rising inflation. Sales of previously built homes dropped to 3.75 million, down 8.8% from a year earlier.
What is the current 30-year mortgage rate in the US?
The 30-year mortgage rate is hovering at about 7.18%. That is close to its 2023 high of 7.79%, and well above the just over 3% seen during the pandemic.
Will the Federal Reserve raise interest rates again?
The Federal Reserve raised rates in September for the first time since 2023. The central bank is expected to raise them again next month to address inflation that rose more than expected in October.
Sources
This article was written with the help of AI from reports by the outlets listed above. See our Editorial Policy. Spotted a mistake? Tell us.
