Existing home sales decreased 5.5% in October 2026 to an annual rate of 3.75 million and were down 8.8% from a year ago, according to NAR. That was well below the consensus of 3.87 million. Prices barely moved: the median price was $416,700, up 0.4% from a year earlier. Sales are collapsing and prices are flat, which points to a frozen market rather than a crashing one.
The driver is borrowing costs. NAR cites Freddie Mac’s 30 year fixed rate at an average of 7.33% in October, compared with 6.25% a year ago. The 10 year Treasury yield has risen to its highest level since 2002 because of worries about high inflation, big government debt loads and other factors. First time buyers fell to 29% of sales, while investors and second home buyers rose to 20%, up from 16% a year earlier.
The bright spot is household balance sheets. Distressed sales were only 2% of all transactions, so most homeowners are staying put rather than being forced to sell. Inventory has built to a 5.1 month supply, which shifts leverage toward buyers.
Blog Post: Existing Home Sales Just Hit Their Lowest Level Since 2010
Existing home sales decreased 5.5% in October 2026 to an annual rate of 3.75 million and were down 8.8% from a year ago, according to the National Association of Realtors. NAR’s Lawrence Yun noted that home sales fell to their lowest level since August 2010. The miss was meaningful. The consensus was 3.87 million sales at a seasonally adjusted annual rate, down from 3.99 million in September and only 20,000 above the current cycle low of 3.85 million from October 2023. October closings mostly reflect contracts signed in August and September, so this report captures buyers at the moment borrowing costs moved above 7%. Prices barely moved: the median existing home price was $416,700 for all housing types, up 0.4% from $414,900 a year earlier, the 40th consecutive month of year over year increases. Sales are collapsing and prices are flat, which points to a frozen market rather than a crashing one.
Sales fell in most of the country, and the West took the hardest hit. West sales fell 9.7% month over month to 650,000, down 14.5% year over year, while South sales dropped 6.5% to 1.73 million. The Midwest fell 3.2% to 900,000, and the Northeast was unchanged at 470,000. Supply is building: total inventory reached 1.59 million units, up 4.6% from October 2025. That is a 5.1 month supply, compared with 4.4 months a year earlier. Fewer buyers are relying on mortgages. First time buyers made up 29% of sales, down from 32% a year earlier, while investors and second home buyers accounted for 20%, up from 16%. Prices are softening in some regions: the South’s median price fell 0.4%, and the West’s was unchanged.
The main driver is the cost of borrowing. NAR cites Freddie Mac’s 30 year fixed rate at an average of 7.33%, up from 6.86% in September and 6.25% a year earlier. The increase comes from the bond market. Mortgage rates have been climbing in the months since the start of the U.S. war with Iran in late February, and the 10 year Treasury yield has risen to its highest level since 2002 because of worries about high inflation, big government debt loads and other factors. The Fed has also tightened. It raised interest rates by 0.25 percentage points for the first time in three years in September, and in late October it held rates, with two votes for another hike. NAR’s housing affordability index came in at 100.7, down from 107.3 a year ago, with declines in every region. Higher long term rates hit housing before other sectors, and October’s report shows the full effect.
The tension is that the damage is to sales volume, not to homeowners’ finances. The number of distressed property sales remains historically low at only 2% of all transactions, and Yun said the 88 million homeowners across the country are largely in a comfortable financial position. Most owners have locked in much lower rates and have no reason to sell. That prevents forced selling, but it also slows the turnover that brokers, lenders, movers and furniture retailers depend on. The pipeline does not look better: home purchase cancellations rose to 14.5% of pending sales in September, the highest rate on record outside the early months of the pandemic. Yun argues that a lot of demand is waiting on the sidelines and could return if rates fall. However, lower mortgage rates now depend on oil prices, inflation expectations and Treasury supply as much as on the Fed. Until rates come down, rising inventory and falling sales will keep shifting leverage toward buyers.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, though Gryphon cannot guarantee their accuracy or completeness. Gryphon does not provide tax, accounting, or legal advice. Individuals should seek such guidance from qualified professionals based on their specific circumstances.