US home october sales plunge to 16-year low amid high mortgage rates

Existing property transactions dropped significantly as new figures revealed a sharp decline for home october activity across the nation. According to data released by the National Association of Realtors, sales of previously built properties fell to 3.75 million during the month, marking an 8.8% decrease compared to the same period last year.

The downturn was driven by a combination of escalating inflation and climbing borrowing costs. The widely used 30-year home loan rate has hovered around 7.18%, approaching the elevated levels seen in 2023 and sitting far above the pandemic-era averages of just over three percent.

Lawrence Yun, chief economist at the organization, noted that purchasing a residence has become exceedingly difficult with borrowing expenses reaching their highest point since 2000, excluding a brief period in 2023. Consequently, transaction volumes dropped to levels not witnessed since August 2010. Decreases were registered across the midwest, south, and western regions, while the north-east remained relatively stable.

High mortgage rates and rising inflation pushed US home sales down to a 16-year low in October.

Financial pressures have been compounded by Federal Reserve policy adjustments, following an interest rate hike that brought benchmarks to a range of 3.75% to 4%. Central bank officials are anticipated to implement further increases to address persistent inflation after consumer price indices exceeded expectations in October.

Pending property purchases, which track signed contracts prior to final closing, also hit historic lows in September. Danielle Hale, chief economist at Realtor.com, suggested that the current market environment stems from a combination of sudden financial shifts and pre-election uncertainties coinciding with the typical seasonal slowdown.

Why it matters

The contraction in the housing sector highlights broader affordability challenges and cost-of-living pressures that have heavily influenced voter sentiment and economic policy discussions. While these developments directly impact the domestic market within the United States, they reflect wider global financial tightening as central banks navigate inflation control.