Existing-Home Sales Drop to 16-Year Low as Rates Rise

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Existing-home sales in the U.S. plummeted to their lowest level in over 16 years in October, driven by a surge in mortgage rates that pressured buyers already grappling with high home prices. According to the National Association of Realtors (NAR), sales dropped 5.5 percent from September to a seasonally adjusted annual rate of 3.75 million. This decline was sharper than the 3.8 percent drop economists had anticipated.

The sales pace marked the weakest since August 2010, when the housing market was still recovering from the financial crisis. The monthly decline was the largest since January, with annual sales down 8.8 percent, the biggest annual decrease since 2023.

Rising Mortgage Rates and Price Pressures

The average rate on a 30-year fixed mortgage rose to 7.33 percent in October from 6.86 percent in September and 6.25 percent a year earlier, according to Freddie Mac figures. October’s completed sales largely reflect contracts signed in September, and the further increase in borrowing costs threatens to weigh on future sales.

Home prices offered little relief, with the national median existing-home price rising 0.4 percent from a year earlier to $416,700. Inventory increased even as sales declined, with 1.59 million homes available at the end of October, up 1.3 percent from September and 4.6 percent from a year earlier. This represented 5.1 months of supply at the current sales pace, compared with 4.7 months in September and 4.4 months a year earlier.

Regional and Price Brackets Decline

Sales fell across three of the four major regions, led by a 9.7 percent decline in the West. The South posted a 6.5 percent decrease, while Midwest sales dropped 3.2 percent. Sales in the Northeast were unchanged. The pullback extended across price brackets, with single-family sales below year-earlier levels in every price category, including a 12.2 percent decline for homes priced between $500,000 and $750,000 and a 6.6 percent decrease for homes costing more than $1 million.

Distressed transactions, including foreclosures and short sales, remained just 2 percent of sales.

Source: Breitbart

Written by

Connor Davis