US existing home sales hit a 16-year low in October as buyers were driven away by record-high mortgage rates and rising inflation, according to new data released on Wednesday.
Sales of already built units dropped to 3.75m in October, down by 8.8% from last year, the National Association of Realtors (NAR) reported. The median existing-home sales price increased slightly to $416,700. Declines in sales were seen in the midwest, south and west, though sales in the north-east held steady.
Mortgage rates had been steadily declining in 2024 and 2025, with the 30-year rate falling below 6% for the first time in February 2026. But increasing inflation and higher interest rates amid the Iran war have pushed rates back up to a nearly three-year high.
The 30-year mortgage rate, which is the most commonly used rate in home loans, is now hovering at about 7.18%, not far from its 2023 high of 7.79%. During the pandemic, average mortgage rates were just above 3%.
"Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023," Lawrence Yun, chief economist at the NAR. "As a result, home sales fell to their lowest level since August 2010."
Pending home sales, or the number of contracts that have been signed before closing, reached its lowest levels in the NAR's history in September, the same month that the 30-year mortgage rate topped 7% for the first time in nearly two years.
Mortgage rates have been directly affected by interest rate changes by the US Federal Reserve, which in September hiked interest rates for the first time since 2023. Rates currently sit at a range of 3.75% to 4%.
The central bank is poised to raise rates again next month to combat heightened inflation, which went up more than expected in October.
Affordability and cost-of-living concerns played an outsized role in the midterm elections that gave Democrats control of Congress next year. According to the latest census data, growth in median rent across the US outpaced inflation. The home-ownership rate in the US has stagnated since 2021, according to the same data.
"I don't think this is a new normal for home sales," said Danielle Hale, chief economist at Realtor.com. "Instead, it reflects a perfect storm of an abrupt shift in the financial environment and large uncertainties in the pre-election period for both policy and the economy just as the housing market usually slows for the season."