Home sales held near 4.1 million for ten months of rising rates, then broke lower in August

US existing-home sales stayed between 4.01 million and 4.27 million a year for ten straight months, from October 2025 through July 2026, while the average 30-year mortgage rate rose from 6.25% to 6.54%. Sales then fell to 3.93 million in August and 3.75 million in October, the National Association of Realtors (NAR) reported, as the monthly average rate reached 7.33%. The monthly figures, published through the St. Louis Fed's database, show a market that held steady until rates rose above roughly 6.6%.

Ten months inside a narrow band

Sales ran at a seasonally adjusted annual rate of 4.11 million in October 2025, 4.09 million in November and 4.27 million in December, the highest of the 13 months. They were 4.02 million in January 2026, 4.13 million in February, 4.01 million in March, 4.04 million in April, 4.19 million in May, 4.13 million in June and 4.06 million in July. The average for those ten months was about 4.11 million (computed).

Over the same ten months the monthly average of Freddie Mac's weekly 30-year rate, published by FRED, ranged from 6.05% in February to 6.54% in July, a spread of 0.49 percentage point (computed). Between those two months sales moved from 4.13 million to 4.06 million, a 1.7% decline (computed). Half a point of extra borrowing cost over five months did not move sales out of the band.

Then three months below it

The break came in August. Sales fell to 3.93 million, which was 3.2% below July (computed), while the average rate rose to 6.67%. September sales were 3.97 million with a 6.86% average rate, and October sales fell to 3.75 million with a 7.33% average. From July to October the rate rose 0.79 percentage point and sales fell 7.6% (both computed). The October level is 8.8% below the same month of 2025, NAR said. A year earlier, October 2025 had 4.11 million sales at a 6.25% average rate. Since then the average rate has risen 1.08 percentage points and the annual sales pace has dropped by 0.36 million (both computed). Both comparisons describe the same direction of change over the same period; neither isolates the effect of the rate from other forces, such as incomes, listings and expectations.

NAR's chief economist, Lawrence Yun, linked the October drop to rates: "Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023." The monthly record is consistent with that reading, though three months do not prove it, and the series says nothing about which buyers dropped out.

Closings lag the rate that buyers signed at

One feature of the data complicates a month-by-month comparison. NAR states that existing-home sales "are based on transaction closings from Multiple Listing Services," which means a home closing in October was typically contracted weeks earlier. The rate that prevailed in August and September, when many October closings were agreed, averaged 6.67% and 6.86%, below the 7.33% average of October itself.

That makes the October reading a measure of contracts written at rates between about 6.7% and 6.9%, not at 7.3%. The weekly rate peaked at 7.40% in the weeks of October 8 and 15 and has since fallen to 7.11% as of November 12, according to Freddie Mac. The sales series cannot yet show how contracts signed at the October peak will close. NAR's report does not give a forecast, and the figures here do not support one.

Prices followed the seasons, not the rate

The median existing-home price tells a different story. It rose from $395,000 in January to $442,800 in June, a gain of 12.1% (computed), then declined each month to $416,700 in October, 5.9% below June (computed). In October it was 0.4% above the $414,900 of October 2025, NAR said, the 40th straight month of year-over-year gains.

Median prices usually rise into early summer and ease afterward, and NAR notes that medians "should be compared with the same period one year earlier because month-to-month comparisons do not account for seasonal buying patterns." On that basis the price record shows a market with almost no year-over-year growth, not a falling one. Inventory is the other side: 1.59 million homes were for sale in October, 4.6% more than a year earlier, and the supply equalled 5.1 months of sales, up from 4.4 months a year earlier.

Sales fell because fewer buyers could pay, not because prices fell

We think the ten-month band and the August break show that buyers tolerated a rate near 6.5% and not one near 6.7% and above. That is a reading of the timing in the data, not a measured threshold, and we would not treat 6.6% as a line. Our reading is that sellers have mostly chosen to wait rather than cut prices, which is why inventory rose 4.6% while the median price stayed 0.4% above a year earlier.

The threat is that contracts written at the October rate peak push closings lower still before they recover. The opportunity is the opposite: with the weekly rate down to 7.11% from 7.40%, we expect, if rates keep easing, sales to stabilize near this level over the next six to twelve months before improving, with regional differences. We would drop that expectation if the weekly rate returns to 7.4%. We would watch pending sales and months of supply, not the median price.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.