Home sales hit 16-year low in October amid record-high mortgage rates

In October, the National Association of Realtors (NAR) reported that residential property sales reached a 16-year low, driven by record-high mortgage rates and rising inflation. New data revealed that the number of built units sold fell to 3.75 million, an 8.8% decrease from the previous year. The median price of existing homes increased slightly to $416,700.

Declines were observed in the Midwest, South, and West regions, while the Northeast saw stable sales. Mortgage rates, which had been declining in 2024 and 2025, began to rise due to increasing inflation and higher interest rates resulting from geopolitical tensions. The 30-year mortgage rate, typically used in home loans, is now around 7.18%, near its 2023 peak of 7.79%.

Lawrence Yun, chief economist at NAR, noted that home buying is challenging when rates are at their highest since 2000, except for one month in 2023. Pending home sales, or signed contracts before closing, hit a new low in September, coinciding with the 30-year mortgage rate surpassing 7% for the first time in nearly two years. Mortgage rates fluctuated based on US Federal Reserve interest rate changes, which increased in September for the first time since 2023.

The Federal Reserve is expected to raise rates once more next month to tackle persistent inflation, which exceeded expectations in October. Affordability and cost-of-living concerns significantly influenced the midterm elections, leading to Democrats gaining control of Congress. Median rent growth in the US outpaced inflation, and the home-ownership rate in the US has remained stagnant since 2021.

Economist Danielle Hale from Realtor.com stated that these conditions are not a new norm for home sales but rather a result of a perfect storm of financial environment shifts and uncertainties during an election period, as the housing market typically slows down seasonally.