Existing Home Sales Hit a 16 Year Low as Mortgage Rates Stay Above 7 Percent
October's sales pace was the slowest since August 2010, and the slowdown is already hitting real estate paychecks, small business plans and insurance costs.
Existing home sales hit their lowest level since August 2010 in October, falling to an annual pace of 3.75 million as mortgage rates stayed above the 7% mark that keeps buyers on the sidelines. That's a 5.5% drop from September and an 8.8% drop from a year ago, the third straight annual decline, according to the National Association of Realtors.
NAR's chief economist Lawrence Yun put it plainly: home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023, and that's why sales fell to their lowest level since August 2010.
What a 16 Year Low in Sales Does to Real Estate Paychecks
Real estate agents, loan officers, title companies, appraisers and movers get paid when a sale closes, not when a house sits on the market. Right now houses are sitting longer. The median time on market rose to 35 days in October, up from 33 days a month ago and 34 days a year ago, and only 29% of sales were first-time buyers, down from 31% a month ago and 32% a year ago. Every one of those slower numbers means fewer commissions and fewer closings to split among the people who make a living off transactions, not just the home itself.
That drop showed up in every region. The Northeast held the smallest annual decline at 4.1%, with 470,000 homes sold at an annual pace. The West took the hardest hit, down 14.5% year over year to 650,000 homes, with sales falling another 9.7% from the month before. The South sold at a 1.73 million pace and the Midwest at 900,000, both down from a month earlier. If you work in real estate in the West right now, this is not a soft patch. It's the sharpest regional slowdown in the country.
Why This Is a Hard Time to Start a Business Tied to Home Turnover
If you're thinking about starting a moving company, a cleaning service, a landscaping crew or anything else that depends on people buying and selling houses, know what you're walking into. Fewer closings means less demand right out of the gate. Just 2% of sales were distressed sales, unchanged from a year ago, so there isn't a wave of foreclosure cleanup work to fall back on either.
But there's a flip side. Active inventory is up 7.2% from a year ago to 842,242 single family homes, and total existing homes for sale rose to 1.59 million, 5.1 months of supply. That's more houses sitting unsold, which means more competition among sellers and more leverage for buyers. If you're building a business around helping sellers stand out, staging, photography, pricing strategy, that's where the work is right now, not in volume.
Where My Insurance Agency Sees This Pressure Land
Selma Hepp, the chief economist at Cotality, said it straight: high rates are keeping monthly payments elevated, tariff-related construction costs are adding pressure to insurance premiums, and property taxes are further straining homeowners. I write both commercial and personal insurance, and this is exactly how it plays out. When it costs more to rebuild a house, the insurance to cover that rebuild costs more too. That premium increase lands on the same homeowner who's already stretched by a mortgage payment at these rates, and it's one more reason buyers are staying on the sidelines instead of making a move.
Hepp also pointed out that the housing affordability index fell from 107.3 a year ago to 100.7 in October, with the Northeast seeing the steepest drop at 8.7% and the West the smallest at 5.2%. That index isn't just mortgage rates. It's the whole monthly cost stack: rate, taxes, insurance and now utility bills on top of it.
What to Watch Before Spring
Sean Fergus at NewHomeSource and Zonda said buyers who backed off when rates hit 7.4% in mid-October won't show up as missing sales until November and December closings, so don't expect this month's numbers to look better. Rates have eased some since then, but as Fergus said, buyers need to trust that relief will last before they come back.
Hepp called the spring homebuying season the real test of whether this market can turn a corner. If you're buying, selling, or running a business that depends on either, watch mortgage rates over the next few months, not just this one data point. A rate move that holds for more than a few weeks is worth more than one good headline.