The National Association of Realtors®’ (NAR) Existing-Home Sales report for October came in on a somewhat dismal note: Existing-home sales decreased 5.5% month-over-month to a rate of 3.75 million.
That marks the lowest level since August 2010’s 3.68 million, according to Realtor.com® Chief Economist Danielle Hale.
Year-over-year home sales were down 8.8% compared to October 2025, which recorded a sales pace of 4.11 million.
Month-over-month sales declined in the Midwest, South and West, but held steady in the relatively “inventory-constrained” and “competitive” Northeast market, Hale noted. Year-over-year sales, however, declined for all four regions.
NAR Chief Economist Lawrence Yun blamed mortgage rates. “Homebuying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023. As a result, home sales fell to their lowest level since August 2010,” he said.
As the housing market enters its slowest season, rates that have held above 7%—a huge leap from before the Iran War, when they touched 6%—have depressed demand and discouraged many buyers, who already face longer-term issues with housing affordability.
Hale concurred with Yun’s diagnosis. According to her, climbing mortgage rates in September (the time when many October closed sales would have been in contract) “were the highest rates of 2026 at the time…and they likely derailed some homebuying plans.”
If mortgage rates “derailed” home-buying plans in October, could the recent ease in mortgage rates signal a gentler turn in the market in the coming months?
Hale thinks the story is not so simple. In her words, the October market “reflect(ed) a perfect storm of an abrupt shift in the financial environment and large uncertainties in the pre-election period for both policy and the economy just as the housing market usually slows for the season.”
She added that “several factors are likely to put a floor under how low rates can go, including a strong economy and jobs market, persistent inflation, and an expected need for tighter monetary policy in the near term combined with sizable demand for capital from both governments and private companies, largely to finance AI-related investments.”
Overall, Hale said she “expect(s) to see more homebuyers come back into the market as we move away from recent mortgage rate highs, but the upside will be limited.”
The whole picture
Sean Fergus, VP of Economic Research at builder-focused data and analytics firms NewHomeSource and Zonda, largely came to the same conclusion as Hale.
“Rates have since eased,” he said, “but buyers need to trust that relief will last before they come back in force.”
Yun had a more positive outlook, predicated on whether mortgage rates continue to decline. In NAR’s press release, he said that “(b)ased 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.”
Yun also commented on the relatively good financial position of homeowners currently, saying that they “are largely in a comfortable financial position due to sizable housing wealth accumulation.”
As evidence for this claim, he pointed to the “historically low” number of distressed property sales, which “remains…at only 2% of all transactions.”
As a final sort of snapshot on the real estate ecosystem, total unsold inventory ticked up 1.3% to 1.59 million units, or the equivalent of 5.1 months’ supply. September 2026 recorded 4.7 months’ worth of unsold inventory, still higher than 4.4 months’ unsold inventory in October 2025, from which 1.59 million units represents a 4.6% yearly increase.
Median existing-home sale prices increased more modestly, only crawling up 0.4% year-over-year to $416,700. The same median price was $414,900 last October. Even so, this is the 40th consecutive month of year-over-year price increases.
