U.S. existing-home sales fell to 3.75 million in October, the lowest level in 16 years, in National Association of Realtors data reported Thursday, Nov. 12.[1] Sales were down 8.8% from a year earlier.[1]
Related: Fed’s Williams and Hammack Signal More Rate Hikes Ahead of the Dec. 8-9 Meeting.
What the report showed
Sales were last this low in August 2010, said Lawrence Yun, the association’s chief economist.[2] The median existing-home sales price rose slightly to $416,700.[2]
Sales declined in the Midwest, South and West.[2] Sales in the Northeast held steady.[2]
Pending home sales count contracts that have been signed but not yet closed.[2] That measure reached the lowest level in the association’s history in September.[2]
Mortgage rates stayed above 7%
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” Yun said.[2]
The average rate on a 30-year fixed mortgage reached as high as 7.40% in October, the highest since 2023.[1] The 30-year rate had fallen below 6% in February 2026.[2]
Rates have eased since October. Freddie Mac’s weekly survey put the 30-year fixed rate at 7.11% as of Nov. 12, down from 7.18% a week earlier.[3] It was the fourth straight weekly decline.[3] A year earlier, the rate averaged 6.24%.[3]
Daily readings moved the other way this week. Mortgage News Daily’s 30-year average rose 12 basis points to 7.30% on Tuesday, Nov. 10, after the October inflation report.[4] The Boston Report covered that report in Consumer Prices Rose 0.4% in October as Food Costs Jumped.
Applications for mortgages to buy a home rose 8% in the latest weekly Mortgage Bankers Association survey.[4] They were still 18% lower than a year earlier.[4]
The Federal Reserve’s role
The Federal Reserve raised its benchmark interest rate in September, its first increase since 2023.[2] The rate stands in a range of 3.75% to 4%.[2]
Higher inflation and bond yields have also pushed mortgage rates up.[1] Fed policymakers have signaled that another increase could come in December.[1]
What economists said
“It was a punch in the gut,” Joel Berner, senior economist at Realtor.com, told NPR.[1] “We expected to see a soft month but not the softest month since 2010,” he said.[1]
Berner said a further Fed increase could feel like “kicking the housing market while it’s down,” but that controlling inflation was the long-run goal.[1]
“I don’t think this is a new normal for home sales,” Danielle Hale, chief economist at Realtor.com, told The Guardian.[2] Hale cited an abrupt shift in the financial environment, pre-election uncertainty and the usual seasonal slowdown.[2]
What happens next
The Fed’s next rate decision comes in December.[1] Freddie Mac publishes its mortgage rate survey each Thursday.[3]
For the local picture, see Greater Boston Added 15,241 Homes Last Year, Nearly Half the Prior Total. More coverage is on the Economics page and the Business News hub.
Sources
- NPR: ‘Punch in the gut’: Homes sales fall to their lowest in 16 years
- The Guardian: Home sales hit 16-year low in October amid record-high mortgage rates
- Freddie Mac: Primary Mortgage Market Survey: Mortgage Rates Decline for Fourth Consecutive Week to 7.11%
- CNBC: Mortgage rates jump sharply higher after easing for 4 straight weeks
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