Why US Home Sales Fell to a 16-Year Low in October 2026

Americans bought previously owned homes in October at the slowest pace in more than 16 years. The National Association of Realtors reported on Thursday that existing-home sales fell 5.5% in a single month to a seasonally adjusted annual rate of 3.75 million — the weakest reading since August 2010, when the country was still climbing out of the subprime mortgage crash. Sales were down 8.8% on a year earlier, and below the 3.85 million pace economists polled by Reuters had forecast. The housing market is not crashing. It is frozen — and the reason is the price of money.

The numbers behind the freeze

The October figures, published by the National Association of Realtors on November 12, are stark in every direction. The 3.75 million annual pace is the lowest since August 2010, when sales were still falling after the end of a homebuyer tax credit. The decline was broad-based, hitting all four major US regions, with the West posting the steepest monthly drop at 9.7%, down to an annual rate of 650,000 units.

What makes the freeze unusual is that prices have not fallen with volume. The national median existing-home price rose 0.4% from a year earlier to $416,700 — a market where almost nobody is buying, yet almost nobody is cutting prices either. Total housing inventory did edge up 1.3% to 1.59 million units, representing a 5.1-month supply, but that is still far below a balanced market. "Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023," the association's chief economist, Lawrence Yun, said in the release.

The 30-year fixed mortgage rate averaged 7.33% across October, according to Freddie Mac — the highest monthly average since 2000, outside a single month in 2023. The rate jumped above 7% in late August and peaked near 7.40% in mid-September. There is a small glimmer since then: Freddie Mac's weekly survey showed the rate at 7.11% on November 12, the fourth consecutive weekly decline and the lowest in seven weeks. But the damage to October's sales was done months earlier, because home sales are counted at closing — October's transactions mostly reflect contracts signed in August and September, the two months when rates were at their worst.

For a buyer, the maths is brutal. At a 7.3% rate, the monthly payment on a median-priced home is hundreds of dollars higher than it was when rates sat below 6% in early 2026. First-time buyers, who have no existing home to sell and no cheap mortgage to carry with them, are the ones squeezed hardest — and they are the buyers a healthy market depends on to keep transactions moving.

The lock-in effect: why nobody sells either

The second half of the freeze is on the supply side, and it has a name economists now use constantly: the lock-in effect. Roughly 78% of outstanding US mortgages carry a rate of 6% or lower, many of them below 4% from the pandemic era. A homeowner with a 3% mortgage who sells and buys again at 7.3% would more than double their interest cost for the same house. So they stay put. Listings stay scarce, prices stay high, and buyers stay away — a standoff in which both sides lose.

That is why falling rates, even the recent four-week decline, have not yet thawed the market. A rate of 7.11% is still more than double what most existing homeowners pay. Until the gap between old mortgages and new ones narrows meaningfully, the incentive to move stays weak, and the inventory that would give buyers choice — and sellers competition — stays locked away.

What to watch next

The next test comes with the November figures, published in December: if the recent drift down in rates continues, and if the usual seasonal slowdown does not mask it, sales should at least stop falling. The Federal Reserve's next moves on interest rates will matter more than any single month of data. But the October number already tells the story of 2026 in housing: a market where the price of borrowing has done what no recession has — brought the world's largest housing market to its slowest pace in sixteen years, without prices falling far enough to bring buyers back. For anyone waiting for a cheaper mortgage or a cheaper house, the wait, for now, continues.