US Home Sales Hit 16-Year Low as Mortgage Rates Stay Above 7%
US existing-home sales fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, the lowest reading since August 2010, according to the National Association of Realtors. Transactions were 8.8% below their October 2025 level.
The weak sales figure arrived as the average 30-year fixed mortgage rate remained above 7%. Freddie Mac put the average at 7.11% on November 12, down slightly from 7.18% a week earlier but well above the 6.24% average a year earlier. That combination of fewer completed sales and still-costly borrowing points to a market in which even a modest improvement in listings has not resolved the affordability problem.
Prices have continued to rise, albeit only marginally in the latest annual comparison, while first-time buyers accounted for a smaller portion of purchases. Cash buyers, who are less exposed to mortgage-rate movements, retained a sizeable share of the market.
October existing-home sales fell to a 3.75 million annual rate
The 3.75 million annualized rate measures the pace of sales after seasonal adjustment rather than the literal number of homes sold during October. Still, its comparison with August 2010 underscores how far activity has retreated: the October result was the lowest in more than 16 years.
October’s 5.5% month-over-month decline followed an already subdued period for resale transactions. The 8.8% year-over-year drop shows that sales were weaker even compared with October 2025, rather than merely reflecting normal seasonal variation.
Existing-home sales are a useful measure of the market facing ordinary buyers and sellers because they cover completed transactions for previously owned homes. The data do not establish that mortgage rates alone caused October’s decline. But the timing matters: financing costs stayed high while prices remained elevated, leaving buyers who need a mortgage with a substantially different calculation than they faced a year earlier.
A 7.11% 30-year mortgage rate keeps the affordability hurdle elevated
Freddie Mac reported that its average 30-year fixed mortgage rate was 7.11% as of November 12. The 0.07-percentage-point weekly decline offers some relief at the margin, but the rate was 0.87 percentage points higher than the 6.24% average recorded a year earlier.
For a buyer financing a home purchase, the mortgage rate affects the monthly principal-and-interest payment and therefore how much home a household can afford under a lender’s borrowing limits. The actual rate offered to an individual borrower can differ from the survey average based on factors including loan terms and borrower qualifications. Taxes, insurance, maintenance and other ownership costs also sit outside that headline rate.
The October sales data and the November rate reading are not from the same day, and home purchases typically take time to close. Even so, the persistence of rates above 7% provides important context for the exceptionally low sales pace. A small weekly rate move is not the same as a return to the considerably lower borrowing-cost environment of a year earlier.
NAR chart showing monthly median existing-home prices from 2000 through October 2026. — Source: National Association of Realtors
More listings have not reversed the rise in existing-home prices
Supply did improve in October, but not enough to produce a year-over-year decline in the national median price. Existing-home inventory rose 1.3% from September to 1.59 million units, representing 5.1 months of supply, Reuters reported. Inventory was 4.6% above its year-earlier level.
A months-of-supply figure estimates how long the available inventory would last at the prevailing sales pace. That measure can increase because more homes are listed, because homes are selling more slowly, or both. In this case, the higher inventory count coincided with a sharp decline in completed sales, so it should not be read simply as a surge in choices for every local buyer.
Meanwhile, the median existing-home price rose 0.4% from a year earlier to $416,700 in October, according to the NAR’s October report. It was the 40th consecutive month of annual price gains.
The median is the midpoint of transactions, not the price of a typical home in every market. It can be affected by the mix of homes sold as well as by changes in individual home values. For prospective buyers, however, the combination is straightforward: a larger inventory pool does not automatically translate into lower purchase prices, particularly when the median sale price is still higher than a year earlier.
First-time buyers lost share as cash purchases held at 29%
First-time buyers represented 29% of existing-home purchases in October, down from 31% in September and 32% a year earlier, NAR said. The one-month change alone does not prove a durable trend, but the annual comparison is consistent with the pressure that high prices and mortgage rates place on buyers entering the market without the equity from a prior home sale.
Cash buyers accounted for 29% of October transactions. Their presence does not mean cash purchasers are unaffected by home prices, but they are not exposed to the immediate payment impact of a new mortgage rate in the same way as financed buyers.
The market’s headline figures therefore show a difficult balance for households considering a purchase: supply was modestly higher and rates eased slightly week to week, yet existing-home sales fell to their lowest annualized pace since 2010, the median price reached $416,700, and the average 30-year fixed rate remained at 7.11%.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.