Existing-home sales have reached their lowest level since August 2010, declining 5.5% month-over-month and 8.8% year-over-year in October 2026, according to the National Association of REALTORS® Existing-Home Sales report. The seasonally adjusted annualized rate dropped to 3.75 million units, marking a significant decline from the previous month's million in September. Month-over-month sales decreased across all four regions - Midwest, South, West, and Northeast - while year-over-year declines were recorded in all regions as well. The median existing-home price increased slightly to $416,700, marking the 40th consecutive month of year-over-year price increases from $414,900 one year ago, though this represents a slight moderation from the previous month's price level. As reported by the NAR, homes stayed on the market for a median of 35 days in October, up from 33 days in September and 34 days in October 2025, indicating longer market times for sellers.
The housing market faces challenging conditions with unsold inventory increasing 1.3% to 1.59 million units, representing a 5.1-month supply according to the NAR report. This inventory level represents the highest months' supply since November 2015 and is up from 4.7 months in September and 4.4 months a year ago. The median existing-home price increased 0.4% to $416,700, marking the 40th consecutive month of year-over-year price increases from $414,900 one year ago. The median time on market increased to 35 days from 33 days in September and 34 days in October 2025, indicating longer market times for sellers. Pending home sales reached their lowest levels in NAR's history in September, coinciding with the same month that the 30-year mortgage rate topped 7% for the first time in nearly two years. The first-time buyer share was 29% in October, down from 31% in September and 32% from a year ago, while all-cash sales share was 29% of transactions, up from 27% last month but unchanged from October 2025.
As reported by the NAR, mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023, creating significant affordability challenges for buyers. The 30-year mortgage rate is now hovering at about 7.18%, not far from its 2023 high of 7.79%, with rates back above 7% again after previous periods of lower rates. NAR Chief Economist Lawrence Yun noted that home buying remains difficult when mortgage rates reach these elevated levels, stating that "home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023." The rate increases have been driven by increasing inflation and higher interest rates amid the Iran war, with the Federal Reserve hiking rates for the first time since 2023 in September to combat inflation that went up more than expected in October. All-cash buyers are less affected by changes in interest rates, as evidenced by their continued market presence despite rising mortgage costs.
Despite the challenging sales environment, 88 million homeowners across the country remain in a comfortable financial position due to sizable housing wealth accumulation, according to the NAR report. The number of distressed property sales remains historically low at only 2% of all transactions. Market analysts suggest that home prices may be too high, mortgage rates too high, or both, for most potential buyers, with the pool of price-insensitive and mortgage rate insensitive buyers - previously around 4 million annualized - appearing to have diminished significantly. The Federal Reserve is poised to raise rates again next month to combat heightened inflation, with rates currently sitting at a range of 3.75% to 4%, adding further pressure on housing affordability. As buyers wait for rate relief, homes are sitting on the market longer, resulting in for-sale inventory climbing close to pre-pandemic levels with inventory between 4.5 to 6 months' supply generally considered a balanced market.
