U.S. existing-home sales plunge to lowest level since 2010 as mortgage rates above 7% freeze buyers

WASHINGTON — America’s housing market sank into its deepest transaction freeze in more than 16 years last month, with sales of previously owned homes tumbling 5.5 percent in October to a seasonally adjusted annual rate of 3.75 million, the National Association of Realtors reported.

The steeper-than-expected drop—economists polled by The Wall Street Journal had braced for a 3.8 percent decline—pulled resale activity down 8.8 percent from October 2025 to its slowest pace since August 2010, when U.S. neighborhoods were still digging out from the subprime foreclosure crisis. Because existing homes make up more than three-quarters of all U.S. residential purchases, the slump leaves full-year 2026 sales on pace to finish below last year’s 4.06 million mark and potentially register the weakest calendar year since 1995.

Mortgage rates above 7 percent lock both sides in place

Because October closings largely reflect purchase contracts signed in late August and September, buyers were hit head-on by an autumn bond-market selloff that pushed 30-year fixed mortgage rates to an October average of 7.33 percent, up from 6.86 percent in September and roughly a full percentage point higher than a year earlier.

NAR chief economist Lawrence Yun noted that outside of a brief spike in late 2023, borrowing costs have hovered near their highest territory since 2000, creating a standoff on both sides of the closing table. Prospective buyers struggle to qualify for monthly payments inflated by steep interest rates, property taxes, and homeowner insurance premiums, while millions of existing owners sitting on pandemic-era loans below 4 percent refuse to give up cheap financing unless life events force a move.

Even recent rate relief has proved modest. Freddie Mac’s weekly survey on Thursday showed the average 30-year fixed mortgage slipping to 7.11 percent from 7.18 percent—its fourth straight weekly dip—while 15-year fixed loans averaged 6.45 percent. On a $400,000 loan, however, that seven-basis-point improvement trims principal and interest by roughly $19 a month, to about $2,691, offering slim relief as resilient U.S. jobless claims and elevated Treasury yields near 5 percent keep Federal Reserve rate-hike fears alive.

Rising inventory fails to crack record October prices

Every region of the country lost ground compared with a year ago, led by a 14.5 percent year-over-year sales drop in the high-priced West and a 4.1 percent decline in the supply-tight Northeast. Month over month, closings fell across the South, Midwest, and West while holding flat in the Northeast.

Normally, plunging sales volume forces sellers to slash asking prices—especially as unsold inventory rose to 1.59 million homes in October, representing 5.1 months of supply at the current sales pace, the widest cushion buyers have seen since late 2015. Yet prices barely budged: the national median existing-home price still ticked up 0.4 percent from a year earlier to $416,700, setting an all-time high for the month of October, while properties sat on the market a median 35 days.

Distressed foreclosures and short sales accounted for just 2 percent of October deals, underscoring that homeowners with strong employment are choosing to wait rather than sell at a discount. First-time buyers, by contrast, bore the brunt of the squeeze, shrinking to just 29 percent of purchases—well below their historical 40 percent norm—while all-cash buyers matched them share for share at 29 percent of the market.