US home sales drop to their lowest pace since August 2010 as mortgage rates top 7.3%

Sales of previously owned US homes fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, the National Association of Realtors (NAR) reported on November 12. The pace is the lowest since August 2010, NAR said, as mortgage rates climbed to their highest monthly average in years.

Every region sold fewer homes than a year ago

Sales were 8.8% below October 2025, NAR said, and the year-over-year decline reached all four regions. From September, sales fell in the Midwest, South and West and held steady in the Northeast. The West fell furthest: sales dropped 9.7% on the month to an annual rate of 650,000 and were 14.5% lower than a year earlier. The South, the largest region, fell 6.5% to 1.73 million. The Midwest declined 3.2% to 900,000, and the Northeast was unchanged at 470,000.

Single-family sales fell 5.8% on the month to 3.41 million, and condominium and co-op sales fell 2.9% to 340,000, according to NAR.

"Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023," NAR Chief Economist Lawrence Yun said. NAR put the average 30-year fixed rate at 7.33% in October, based on Freddie Mac data, up from 6.86% in September and 6.25% a year earlier.

Prices held while inventory built

The median existing-home price was $416,700, up 0.4% from $414,900 a year earlier, NAR said, the 40th consecutive month of year-over-year increases. The median was lower than a year earlier in the South (down 0.4%) and unchanged in the West at $624,300, while the Northeast rose 3.2% to $519,600.

Total inventory was 1.59 million units, up 1.3% from September and 4.6% from October 2025. That equals a 5.1-month supply at the current sales pace, up from 4.7 months in September and 4.4 months a year earlier. The median home spent 35 days on the market, against 33 days in September and 34 days a year ago.

NAR's Housing Affordability Index registered 100.7 in October, down from 107.3 a year earlier, and affordability declined year over year in all four regions.

Who was still buying

First-time buyers accounted for 29% of sales, down from 31% in September and 32% a year earlier. Cash sales made up 29% of transactions, up from 27% in September. Individual investors and second-home buyers accounted for 20%, up from 16% in October 2025. Distressed sales were 2% of the total, unchanged from a year earlier.

Yun said that 88 million homeowners "are largely in a comfortable financial position" and that "there could be sizable pent-up demand if mortgage rates decline."

Rates have eased since the month ended

Closings in October reflect contracts signed in the preceding weeks. Freddie Mac's weekly survey showed the 30-year fixed rate averaging 7.11% as of November 12, down from 7.18% the week before and the fourth straight weekly decline, though above the 6.24% of a year earlier. FinanceInTime covered that survey in its report on the fourth weekly fall.

A thin market that rates, not prices, will reopen

We think October shows a market that is stuck rather than falling. Prices still edge up, and distressed sales are a small share, so there is no sign of forced selling in NAR's data; what has shrunk is the number of buyers able to carry a payment at 7%. Inventory is building because homes sit longer, not because owners are rushing to sell.

The opportunity is the one Yun describes: sales would likely recover if borrowing costs keep slipping, since more listings give buyers more choice. The threat is that rates turn up again before the pending-sales pipeline rebuilds. We expect, conditional on rates continuing to ease, that sales stay near this pace for several months before improving, and we would give that forecast little weight if mortgage rates move back toward 7.3%. We would watch pending sales and months of supply in the next two reports rather than 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.