U.S. existing-home sales fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, the lowest since August 2010, according to the National Association of REALTORS (NAR).
Rising borrowing costs meant that sales were 8.8% lower than a year earlier, and signed contracts point to further weakness ahead. The average 30-year fixed-rate mortgage was 7.33% in October, according to Freddie Mac, up from 6.86% in September and 6.25% one year ago. Month-over-month sales declined in the Midwest, South, and West and held steady in the Northeast. Year-over-year sales declined in all four regions. The West was hit hardest: sales fell 9.7% from September to an annual rate of 650,000 and were down 14.5% on the year. Sales in the South, the largest market, fell to 1.73 million, down 8% from October 2025. Single-family sales fell to an annual rate of 3.41 million, and condo and co-op sales fell to 340,000.
Leading indicators suggest the slowdown will continue. Redfin reports that pending home sales fell 3.6% from a month earlier in October on a seasonally adjusted basis to their lowest level since 2013, with the exception of April 2020; that pending sales fell in every major U.S. metro; and the high share of canceled contracts. NAR Chief Economist Lawrence Yun said that with job growth holding up, “there could be sizable pent-up demand if mortgage rates decline,” but that relief may be some time away. All 101 economists in a November Reuters poll expect the Federal Reserve to raise interest rates by a quarter point to 4%-4.25% at its December 9 meeting. Although the Fed does not set mortgage rates directly, a further hike would signal that borrowing costs are likely to stay high well into next year.
IAM Member Impact: Home sales at a 16-year low will mean fewer moves through the end of the year, and the drop in pending sales and the rise in canceled contracts suggest closings will stay weak into early 2027.
Source: National Association of REALTORS; Redfin; Reuters via Yahoo Finance