NAR’s October data confirms a 16-year sales low amid 7% mortgage rates
Existing-home sales in October fell to their weakest pace in 16 years, extending a slowdown that has tested mortgage brokers and their clients throughout the year.
The National Association of Realtors (NAR) reported Thursday that existing-home sales dropped 5.5% month-over-month to a seasonally adjusted annual rate of 3.75 million.
That's an 8.8% retreat from October 2025 and the latest sign of a market in retreat after existing-home sales hit a 14-month low.
The average 30-year fixed-rate mortgage stood at 7.33% in October, according to Freddie Mac, its highest mark since 2000.
Rates at a 23-year high drive buyers from the market
Sales contracted in three of the four major US regions.
The West posted the steepest monthly decline at 9.7%, retreating to an annual rate of 650,000 units and falling 14.5% year-over-year.
The South shed 6.5% from September, the Midwest fell 3.2%, and the Northeast held steady month-over-month but posted a 4.1% year-over-year drop.
“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,” said Lawrence Yun, chief economist at the National Association of Realtors in Washington, DC.
For mortgage brokers, the qualifying challenge has become acute. Nicholas Barta, division president at Security First Financial in Denver, Colorado, described the environment in a previous interview with Mortgage Professional America on how rising rates are driving buyers to the sidelines.
“There’s not as many people that will qualify to purchase homes, or they can’t qualify to purchase the homes that they want because they qualify at a lower level.”
That strain registered in buyer demographics.
First-time homebuyers represented just 29% of October transactions, down from 31% in September and 32% a year ago.
Individual investors captured 20% of all deals, up from 16% in October 2025, as cash buyers with no rate exposure gained a relative edge.
Affordability pressures deepen as the spring market approaches
NAR’s Housing Affordability Index registered at 100.7 in October, against 107.3 a year earlier, with declines across all four regions — the Northeast leading at 8.7%.
With elevated mortgage rates forecast to remain near multi-year highs through 2026, inventory of 1.59 million units represented 5.1 months’ supply.
The median existing-home price held at $416,700, a 0.4% annual gain and the 40th consecutive month of year-over-year price growth.
Selma Hepp, chief economist at Cotality in California, recently told MPA that buyers sitting on the sidelines may be making a costly miscalculation.
“I’ve always believed that waiting for rates is a very dangerous game, because you just look at what happened,” she said.
With rates having defied earlier forecasts for a meaningful decline, Hepp said brokers need to reset client expectations.
“Our narrative is changing, and we’re saying, ‘Hey, higher for longer.’ In fact, you’re probably not going to see low 6s next year,” she added.
For brokers looking to convert hesitant buyers, Hepp pointed to two tools gaining traction: rate buydowns, now appearing on resale properties as well as new builds, and adjustable-rate mortgages.
“ARMs are on the up again,” she said. “People are being creative.”
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