US existing home sales fell 5.5 percent in October from September and 8.8 percent from a year earlier, to a seasonally adjusted annual rate of 3.75 million, the National Association of Realtors said on Thursday, the lowest pace since August 2010 and below the 3.85 million rate economists polled by Reuters had expected. Sales fell in the Midwest, South and West and held steady in the Northeast, and chief economist Lawrence Yun tied the drop directly to borrowing costs: the average 30 year fixed mortgage rate was 7.33 percent in October, up from 6.86 percent in September, which Yun called the highest levels since 2000 aside from a single month in 2023.
Prices have not followed volume down. The median existing home price was $416,700, up 0.4 percent from a year earlier in a 40th straight month of year on year increases, while total inventory rose to 1.59 million units, a 5.1 month supply at the current pace. Yun said distressed sales remain historically low at 2 percent of transactions and that the slow pace, against consistent job growth, could mean sizable pent up demand if mortgage rates decline.