US Existing Home Sales Hit 16-Year Low in October

The US residential real estate market hit a new critical point in October. According to data released on Wednesday by the National Association of Realtors (NAR), existing home sales dropped to 3.75 million units, marking the lowest level in the past 16 years. The year-over-year decline was 8.8%.

Why it matters

Rising credit costs are drastically reducing buyers’ ability to enter the market. Lawrence Yun, Chief Economist at NAR, explained that buying homes is difficult with rates at their highest since 2000, excluding a single month in 2023. This dynamic has pushed sales to the lowest level observed since August 2010.

Danielle Hale, Chief Economist at Realtor.com, emphasized that the current situation does not represent a new structural normality but reflects a combination of adverse factors. She described the moment as a “perfect storm” due to the sudden change in the financial environment and uncertainties linked to the pre-election period.

The numbers

The median sales price for existing homes stood at $416,700 USD. The determining factor for the demand decline is the trend in mortgage interest rates. Currently, the average rate for 30-year mortgages is at 7.18%, a level close to the peaks recorded in the recent three-year period (the 2023 peak was 7.79%).

The macroeconomic context sees the Federal Reserve with an interest rate range between 3.75% and 4%. Mortgage rates had fallen below 6% for the first time in February 2026, but subsequently rose again. In September, pending sales reached their lowest levels in NAR history when the 30-year rate exceeded 7% for the first time in nearly two years.

What remains to be understood

It is not yet confirmed whether the Federal Reserve will raise interest rates again next month to combat inflation, which showed an increase above expectations in October. Furthermore, there are no definitive confirmations regarding the disproportionate role of concerns about cost-of-living sustainability in the recent midterm elections.

Sources: The Guardian US Business, NPR Business.

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This article is for informational purposes only and does not constitute financial advice or an investment recommendation.

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