US Home Sales Hit 16-Year Low Amid Record-High Mortgage Rates

U.S. existing home sales fell to their lowest level since 2010 in October, according to new data from the National Association of Realtors (NAR).

The Bottom Line:

Existing home sales dropped to an annual rate of 3.75 million in October, an 8.8% decline from the previous year.
The 30-year fixed-rate mortgage hit a peak of 7.40% in October, the highest level recorded since 2023.
Single-family home sales fell 5.8% from September, while condo and co-op sales hit a record low dating back to 2011.

Mortgage rates paralyze housing activity

High borrowing costs are effectively freezing the residential real estate market. The 30-year fixed-rate mortgage, the primary benchmark for home loans, hovered near 7.18% in October, according to The Guardian.

This surge follows a period of relative stability. Mortgage rates had been declining through 2024 and 2025, even dipping below 6% in February 2026, but rising inflation and geopolitical tensions related to the Iran war have pushed yields back up, The Guardian reported.

“It was a punch in the gut,” said Joel Berner, senior economist at Realtor.com, according to NPR.

Berner said that while a soft month was expected, the decline reached its lowest level since 2010.

US Home Sales Hit 16-Year Low Amid Record-High Mortgage Rates — Photo: NPR

Sales decline across most regions while Northeast holds steady

The slowdown is not uniform across the country. While sales in the Northeast held steady, significant declines were recorded in the Midwest, South, and West, The Guardian reported.

Specific regional data provided by Wolf Street highlights the severity of the slump:

Region/Category	Metric Performance (October)	Historical Comparison
West (Single-Family)	Collapsed	Lowest since at least 1999
Midwest (All Existing)	900,000 annual rate	Lowest since 2011
South (All Existing)	1,730,000 annual rate	Lowest since January 2012
Condos & Co-ops	340,000 annual rate	Record low since 2011

Despite the drop in transactions, supply is actually increasing. Single-family home supply rose to 4.9 months in October, the highest level for any October since 2014, Wolf Street reported.

The Federal Reserve’s tightening impact

The contraction in the housing market appears to be a direct consequence of Federal Reserve policy. In September, the central bank raised its benchmark interest rate to combat inflation, a move that increased the cost of borrowing across the economy, NPR reported.

The Fed’s objective is to reduce economic activity to bring inflation under control. Policymakers have signaled that another rate hike could arrive in December, which may further depress housing volume, NPR reported.

Existing Home Sales CRASH to 16-Year Lows — Worst Since 2010 — Randy Patrick

“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, chief economist at the NAR.

This tightening cycle creates a “Main Street” squeeze. As mortgage rates climb, the barrier to entry for first-time buyers increases, while existing homeowners are often “locked in” to lower pandemic-era rates, preventing them from selling and contributing to the inventory imbalance.

Home prices fluctuate as specific metropolitan areas see drops

While sales volume has plummeted, home prices have not seen a uniform decline. The median existing-home sales price rose slightly to $416,700, The Guardian reported.

However, significant price drops are occurring in specific metropolitan areas. Wolf Street said that single-family home prices in Austin, Texas, fell by 26%, while Oakland, California, saw a 23% decline.

Conversely, some markets are seeing price increases that exacerbate affordability issues. In Chicago, prices rose 6.1% year-over-year, Wolf Street reported.

“I don’t think this is a new normal for home sales,” said Danielle Hale, chief economist at Realtor.com.

Hale suggested the current slump reflects a “perfect storm” of a shifting financial environment and pre-election economic uncertainty, The Guardian reported.

The market now looks toward the Federal Reserve’s December meeting to determine if the cycle of fiscal tightening will continue.

Disclaimer: The information provided in this article is for educational and market analysis purposes only and does not constitute financial, investment, or legal advice. Always consult with a certified financial professional before making investment decisions.