US Home Sales Fall to 16-Year Low as Mortgage Rates Bite
Americans bought previously owned homes in October at the slowest pace in more than 16 years, as high mortgage rates and stubbornly elevated prices kept buyers on the sidelines and the housing market frozen.
Sales of existing homes fell 5.5% last month to a seasonally adjusted annual rate of 3.75 million units, the National Association of Realtors said on Thursday. That was the lowest reading since August 2010, when sales were still falling in the aftermath of the homebuyer tax credit, and 8.8% below the same month a year ago.
Economists polled by Reuters had expected sales to fall only to a 3.85 million pace, so the result came in weaker than forecasters had pencilled in, underscoring how sharply higher borrowing costs have squeezed demand.
The October numbers
The headline figure tells only part of the story. Sales are counted at the closing of a contract, so October’s transactions mostly reflect deals agreed in August and September — the two months when mortgage rates were at their worst.
The declines were broad-based, with sales falling across all four major regions of the country, according to the Realtors’ data. And while transactions have dried up, prices have not followed them down.
The median price of an existing home rose 0.4% from a year earlier to $416,700, marking the 40th consecutive month of annual price gains. For buyers, that combination — fewer deals, no real price relief — is the worst of both worlds.
Rates are doing the damage
The 30-year fixed mortgage rate averaged 7.33% across October, according to Realtor.com’s economics team, and peaked near 7.40% in mid-September after jumping above 7% in late August. Freddie Mac data show rates have risen 142 basis points since the United States and Israel attacked Iran at the end of February.
There was a glimmer of relief in the weekly figures. Freddie Mac’s survey, released on the same morning as the Realtors’ report, showed the 30-year fixed rate averaging 7.11%, down from 7.18% the week before — the fourth consecutive weekly decline and the lowest level in seven weeks. The 15-year fixed rate averaged 6.45%, down from 6.57%.
That improvement helps explain why mortgage rates have fallen for a fourth straight week even as home sales keep sliding: the weekly rate figures capture new borrowing conditions, while completed sales lag weeks behind.
“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 National Association of Realtors’ chief economist.
The lock-in effect
Behind the headline numbers sits a structural problem that lower rates alone may not quickly fix. Millions of homeowners refinanced or bought during the pandemic era at mortgage rates below 4%, and selling now would mean giving up that cheap loan for one costing roughly twice as much.
Analysts call it the lock-in effect, and it has thinned the supply of homes for sale even as demand has cooled. Owners who might otherwise move for a new job or a bigger home are staying put, which keeps prices supported even while transaction volumes collapse.
The result is a market that works for almost nobody: first-time buyers cannot afford the monthly payments, existing owners cannot afford to move, and sellers who do list find fewer bidders.
What comes next
The outlook now hinges on whether the recent drift lower in mortgage rates continues. A sustained move back towards 6.5% would restore meaningful purchasing power, but rates remain hostage to bond markets and to the Federal Reserve’s next moves.
For now, the broader economy has not cracked. US job openings jumped in September, and US stock markets steadied after a sharp fall, suggesting the housing freeze remains contained rather than spilling into a wider downturn.
Still, housing is usually one of the first sectors to feel tighter money — and one of the slowest to recover from it. With sales at a 16-year low and prices still climbing, October’s report is a reminder that the American housing market is not so much crashing as simply standing still.
Frequently asked questions
How low did US home sales fall in October 2026?
Existing-home sales fell 5.5% to a seasonally adjusted annual rate of 3.75 million, the lowest since August 2010 and 8.8% below October 2025, according to the National Association of Realtors.
What is the median US home price now?
The median existing-home price was $416,700 in October, up 0.4% from a year earlier — the 40th straight month of annual gains.
Why are US home sales so low?
Mortgage rates above 7% have pushed monthly payments out of reach for many buyers, while homeowners with cheap pandemic-era loans are reluctant to sell, keeping supply tight and prices high.
