U.S. Home Sales Sink to Slowest Pace in 16 Years as Mortgage Rates Top 7%

WASHINGTON, Nov. 12 (TodayViralUSA) — Sales of previously owned U.S. homes fell in October to their slowest pace in more than 16 years, as the steepest mortgage rates in decades pushed more would-be buyers to the sidelines.

Existing-home sales dropped 5.5% from September to a seasonally adjusted annual rate of 3.75 million, the National Association of Realtors said Thursday. That was down 8.8% from a year earlier and the weakest reading since August 2010.

Rates do the damage

The average rate on a 30-year fixed mortgage was 7.33% in October, according to Freddie Mac, up from 6.86% in September and 6.25% a year earlier.

“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, the association’s chief economist. “As a result, home sales fell to their lowest level since August 2010.”

Prices hold, supply builds

Even with fewer deals, prices have not cracked. The national median sale price rose 0.4% from a year earlier to $416,700, the 40th straight month of annual gains. Single-family homes had a median price of $421,900.

Inventory climbed 1.3% from September to 1.59 million homes, equal to a 5.1-month supply, up from 4.4 months a year ago. Homes sat on the market for a median 35 days, and the realtors’ affordability index fell to 100.7 from 107.3 a year earlier, with affordability worsening in every region.

West hit hardest

Sales fell from September in the Midwest, South and West and were flat in the Northeast. The West took the biggest blow, with sales down 9.7% on the month and 14.5% from a year ago.

First-time buyers made up 29% of purchases, down from 32% a year earlier, while all-cash deals also accounted for 29%. Distressed sales remained at just 2% of transactions.

Pent-up demand

Yun noted that most of the country’s 88 million homeowners remain on solid financial footing thanks to accumulated housing wealth. “Based on the current underwhelming home sales pace at a time of consistent job growth, there could be sizable pent-up demand if mortgage rates decline,” he said.