U.S. existing-home sales plunged 5.5% in October 2026, falling to their lowest level in more than 16 years as a sharp increase in mortgage rates further weakened housing demand and left prospective buyers struggling with affordability.
Sales of previously owned homes declined to a seasonally adjusted annual rate of 3.75 million, down 8.8% from October 2025, according to the National Association of Realtors (NAR). The latest figures underscore the mounting pressure on the housing market as borrowing costs climb and transactions slow across most of the country.
October’s annualized sales pace was the weakest since August 2010, reflecting a market increasingly constrained by elevated financing costs. The average rate on a 30-year fixed-rate mortgage rose to 7.33% in October, up from 6.86% in September and 6.25% a year earlier, according to Freddie Mac.
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” said Lawrence Yun, NAR’s chief economist. “As a result, home sales fell to their lowest level since August 2010.”
Inventory Builds as Buyers Gain Negotiating Power
Despite the steep decline in transactions, housing inventory continued to expand. The number of existing homes available for sale reached 1.59 million units in October, up 1.3% from September and 4.6% from a year earlier.
At the current sales pace, available inventory represents 5.1 months of supply, compared with 4.7 months in September and 4.4 months in October 2025. The increase suggests buyers have more options and potentially greater negotiating leverage than they did a year ago.
However, the growing supply has yet to translate into meaningful price declines nationally.
The median existing-home price reached $416,700 in October, a 0.4% increase from $414,900 a year earlier. October marked the 40th consecutive month of year-over-year median price appreciation, illustrating the continued resilience of home values despite weakening transaction activity.
Housing affordability nevertheless deteriorated. NAR’s Housing Affordability Index fell to 100.7, down from 107.3 a year earlier, reflecting the combined impact of higher mortgage rates and persistently elevated home prices.
Sales Decline Across Most of the Country
Existing-home sales weakened in three of the four major U.S. regions during October, with the West experiencing the steepest monthly contraction.
The South recorded the largest share of national transactions, with sales falling 6.5% from September to an annualized rate of 1.73 million. Sales were down 8.0% from a year earlier, while the median price declined 0.4% to $360,900.
In the West, sales dropped 9.7% month over month to an annualized rate of 650,000, representing a 14.5% decline from October 2025. The median price was $624,300, unchanged from a year earlier.
Midwestern sales decreased 3.2% from September to an annualized rate of 900,000, down 8.2% year over year. The region’s median home price increased 1.5% to $324,300.
The Northeast was the only region to avoid a monthly decline, with sales unchanged at an annualized rate of 470,000. However, transactions were still 4.1% below their year-earlier level. The median price rose 3.2% to $519,600.
Single-Family and Condo Markets Both Weaken
The slowdown extended across both major segments of the existing-home market.
Single-family home sales declined 5.8% in October to an annualized rate of 3.41 million, down 8.6% from a year earlier. The median single-family home price increased 0.4% annually to $421,900.
Condominium and cooperative apartment sales fell 2.9% month over month to an annualized rate of 340,000, a 10.5% decline from October 2025. The median condo and co-op price increased just 0.3% to $365,100.
The sharper annual decline in condominium transactions highlights the continued weakness in that segment of the housing market.
First-Time Buyers Lose Ground
Market conditions remained particularly challenging for first-time homebuyers, who accounted for just 29% of October transactions, down from 31% in September and 32% a year earlier.
Properties typically remained on the market for 35 days before selling, compared with 33 days in September and 34 days in October 2025.
Cash purchases represented 29% of transactions, up from 27% the previous month but unchanged from a year earlier. Individual investors and second-home buyers accounted for 20% of sales, unchanged from September but up from 16% a year earlier.
Distressed transactions remained limited, representing just 2% of sales, including foreclosures and short sales. That share was unchanged from both September and October 2025.
Housing Wealth Provides a Cushion
Despite the sharp contraction in home sales, NAR’s Yun emphasized that existing homeowners remain in a comparatively strong financial position, supported by substantial home equity accumulated over years of property appreciation.
“The 88 million homeowners across the country are largely in a comfortable financial position due to sizable housing wealth accumulation,” Yun said, noting that distressed property sales remain historically low.
He also suggested that the current weakness in transactions could create substantial pent-up demand if mortgage rates eventually decline.
With employment growth continuing but mortgage financing becoming increasingly expensive, the housing market faces a widening disconnect between the financial position of existing homeowners and the purchasing power of prospective buyers.
For now, October’s figures point to a housing market struggling to generate transaction volume, even as home prices remain broadly resilient and inventory gradually improves. A sustained recovery in sales may ultimately depend less on additional price appreciation than on a meaningful improvement in mortgage affordability.
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