U.S. Existing Home Sales Fall to Lowest Level Since 2010 in October

what happened

The National Association of Realtors (NAR) reported on Thursday that existing home sales in the U.S. dropped 5.5% in October, to an annual rate of 3.75 million. Economists had expected a smaller decline of 3.5%, to 3.85 million. September's figure was revised to 3.97 million from the originally reported 3.99 million.

NAR Chief Economist Lawrence Yun linked the weak demand to high mortgage rates: “Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” he said. The steepest declines were in the West (down 9.7%) and the South (down 6.5%), while sales in the Midwest fell 3.2% and in the Northeast were unchanged.

Unsold inventory at the end of October rose to 1.59 million units, up 1.3% from September and 4.6% from a year earlier. That equals 5.1 months of supply, up from 4.7 months in September. The median existing home price was $416,700, down 0.4% from September but up 0.4% from a year ago.

why it matters

The sharp sales drop combined with rising inventory suggests the housing market is still cooling under expensive borrowing costs. For homebuilders and lenders tied to mortgages, the data signal that demand is highly sensitive to the price of credit, and a larger stock of unsold homes could limit price gains. Weak readings like this keep mortgage rates in focus for investors.

market impact

U.S. housing: weak demand and rising inventory weigh on homebuilders

• ▼U.S. homebuilder stocks pressure down — weak demand and rising unsold inventory pressure builders' sales

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