The US housing market has recorded its slowest sales pace in more than 16 years, with transactions falling sharply in October as higher borrowing costs continue to weigh on buyer demand.
Figures from the National Association of Realtors (NAR) show existing-home sales fell 5.5 per cent from September to a seasonally adjusted annual rate of 3.75 million, the weakest result since August 2010.
Sales were also 8.8 per cent lower than a year earlier, with the latest figures falling short of economists’ expectations of 3.8 million, according to the Associated Press.
The slowdown comes despite an increase in available properties, creating a market where buyers have more choice and sellers face greater competition.
NAR Chief Economist Lawrence Yun said mortgage rates were making it increasingly difficult for buyers to enter the market.
“Home buying 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,” Mr Yun said.
More listings give buyers greater choice
Housing inventory increased 1.3 per cent during October to 1.59 million properties, representing a 4.6 per cent increase compared with the same time last year.
At the current sales pace, that equates to 5.1 months of supply, up from 4.7 months in September and 4.4 months a year earlier.
According to the Associated Press, this was the highest level of unsold inventory since November 2019, while the months of available supply reached its highest level since November 2015.
The increase in stock is giving buyers more opportunities to negotiate, particularly where properties have been on the market for extended periods.
Homes spent a median of 35 days on the market in October, compared with 33 days in September and 34 days a year earlier.
Separate figures from Realtor.com, cited by the Associated Press, showed the national median asking price fell 2.2 per cent annually to US$415,000, with approximately 20.5 per cent of listings undergoing a price reduction.
However, while asking prices have softened, completed sale prices have continued to rise.
The national median existing-home sale price reached US$416,700 in October, a 0.4 per cent increase from a year earlier and the 40th consecutive month of annual price growth.
The contrast highlights a market where transactions are slowing and sellers are adjusting expectations, but completed sales are still achieving slightly higher prices than a year ago.
First-home buyers retreat as borrowing costs rise
First-home buyers accounted for just 29 per cent of transactions in October, down from 31 per cent in September and 32 per cent a year earlier.
The average 30-year fixed mortgage rate reached 7.33 per cent during the month, according to Freddie Mac, compared with 6.86 per cent in September and 6.25 per cent in October 2025.
Higher borrowing costs have reduced purchasing power and contributed to prospective buyers delaying their plans.
Cash buyers, meanwhile, accounted for 29 per cent of transactions, up from 27 per cent in September, while individual investors and second-home buyers represented 20 per cent of sales, compared with 16 per cent a year earlier.
The slowdown has also varied considerably across the country.
Sales in the West fell 9.7 per cent during October and were 14.5 per cent lower than a year earlier, while the South recorded a 6.5 per cent monthly decline.
The Midwest experienced a 3.2 per cent fall, while sales in the Northeast remained unchanged from September.
Despite the broader weakness, the Northeast recorded annual median price growth of 3.2 per cent, while prices in the South fell 0.4 per cent.
Pent-up demand could support a future recovery
While transaction volumes have fallen to levels not seen since the aftermath of the global financial crisis, NAR said the current market differs from previous periods of housing distress.
Distressed sales, including foreclosures and short sales, accounted for just 2 per cent of October transactions.
Mr Yun said many existing homeowners remained in a relatively strong financial position despite the weaker sales environment.
“Despite fewer transactions in October, the 88 million homeowners across the country are largely in a comfortable financial position due to sizable housing wealth accumulation. The number of distressed property sales remains historically low at only 2% of all transactions,” he said.
“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.”
This story draws on reporting from AP and the National Association of REALTORS®. Read the original AP report here and the NAR release here.