US Existing Home Sales Plummet to 2010 Lows
High mortgage rates and market volatility drive US home sales to historic lows.
1Historic Sales Decline
Sales of previously owned homes in the United States reached their lowest level since August 2010. The National Association of Realtors reported a 5.5 percent drop in October, bringing the seasonally adjusted annual rate to 3.75 million units. This downturn reflects a broader slump that has persisted across the American housing market since 2022.
2Impact of Mortgage Rates
Mortgage rates hovering above 7 percent have created a challenging environment for both buyers and sellers. The average 30-year fixed-rate mortgage reached 7.33 percent in October, significantly higher than the 6.25 percent recorded one year ago. These elevated borrowing costs remain at their highest levels since 2000, excluding a brief spike in 2023.
3Regional Market Performance
Year-over-year sales declined across all four major US regions, highlighting a nationwide trend of reduced activity. Month-over-month data shows sales fell in the Midwest, South, and West, while the Northeast remained steady. These figures are based on contract closings, typically reflecting purchase agreements that were originally signed during August and September.
4Struggling First-Time Buyers
First-time buyers accounted for only 29 percent of home purchases in October, a decline from 31 percent in September. Historically, this demographic typically represents closer to 40 percent of the market. This drop underscores the difficulty new entrants face when attempting to secure financing in a high-interest rate environment with limited inventory.
5Economic Drivers of Rates
Mortgage rates are heavily influenced by inflation, Federal Reserve policy, and bond market investor expectations. These rates generally track the 10-year Treasury yield, which lenders use to price home loans. Recent volatility in the bond market has directly contributed to the upward pressure on borrowing costs, complicating affordability for potential residential property purchasers.
6Geopolitical and Inflationary Pressures
Rising mortgage rates since late February were exacerbated by the US war with Iran. This conflict pushed oil prices higher, fueling inflation and increasing bond market volatility. Consequently, yields on US Treasuries rose, forcing lenders to adjust their pricing models, which further constrained the housing market throughout the remainder of the year.
7Homeowner Financial Position
Despite the significant slowdown in transaction volume, the 88 million homeowners across the country remain in a relatively comfortable financial position. Most have accumulated sizable housing wealth over previous years, providing a buffer against current market stagnation. This equity accumulation helps explain why the market has not seen a widespread forced-selling crisis.
8Future Market Outlook
The US housing market remains stuck at a 30-year low, with sales essentially flat throughout the previous year. NAR Chief Economist Lawrence Yun expects total home sales for 2026 to finish lower than the 2025 figures. Observers should monitor upcoming Federal Reserve policy shifts and bond market stability to gauge any potential recovery in 2027.
Original article: Al Jazeera English – All News — US Existing Home Sales Plummet to 2010 Lows