Home sales plummet to lowest level since the Great Recession as buyers flee the market

By Aarthi Swaminathan

Even as home sales fall, prices continue to rise, hitting an all-time high

New data provide the latest sign that the housing market is on weak footing.

Home sales fell in October to a 16-year low as buyers bolted from the housing market in the face of 7% mortgage rates.

Sales of existing homes fell 5.5% from the previous month and were down 8.8% from last October to a 3.75 million pace, according to data released Thursday by the National Association of Realtors.

The pace of sales was the lowest since the depths of the recession in August 2010. Back then, sales bottomed as the subprime mortgage crisis resulted in an abundance of houses for sale nationwide.

"It is just a tough market for buyers and sellers," Lawrence Yun, chief economist at NAR, said on a call with reporters. "We have seen mortgage rates continue to increase," which is hurting affordability, he added.

The drop in home sales wasn't a complete surprise. Data on pending home sales had indicated that sales of existing homes would fall significantly based on the contracts buyers and sellers were signing in September.

But the latest data provide yet another signal that the housing market is on weak footing. Mortgage rates remained over 7% and were inching even higher in mid-November as a result of ongoing geopolitical tensions between the U.S. and Iran.

"High rates are keeping monthly payments elevated, while tariff-related construction costs are adding pressure to insurance premiums and property taxes are further straining homeowners," Selma Hepp, chief economist at Cotality, a real-estate analytics company, said in a statement.

"Rising everyday expenses, including utility bills, are also squeezing household budgets. Together, these pressures are limiting momentum in existing-home sales," she added.

Despite the pullback by buyers, home prices increased. In October, the median sale price across all existing-home types rose 0.4% from a year ago to $414,900, the highest figure on record. The median price of a single-family home in October was $421,900, while the figure for condos and co-ops was $365,100.

"For housing, the key question is not simply whether mortgage rates decline, but whether they fall enough to meaningfully improve purchasing power and bring more buyers and sellers back to the market," Hepp said.

-Aarthi Swaminathan

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11-12-26 1001ET