U.S. previously owned home sales fell last month to a 16-year low as a cascade of negative news on mortgage rates and inflation deterred would-be buyers.

Contract closings in October decreased 5.5% to an annualized rate of 3.75 million, according to figures released Thursday by the National Association of Realtors.

Sales plummeted in the West to the slowest pace in data back to 1999 and hit the lowest levels in more than a decade in both the South and Midwest.

The housing market looks increasingly grim as discouraged buyers grapple with mortgage rates above 7% and stubbornly high inflation across the economy.

At the same time, the pullback in demand may eventually help to improve affordability. Separate figures this week from online marketplace Redfin showed 36% of homes that sold last month had at least one price drop, marking the highest share in the company’s data.

The active inventory of existing homes on the market continued to rise last month, even as the number of new listings weakened, Bloomberg Intelligence analyst Drew Reading said in a Nov. 9 note. That also suggests price relief may be building.

“Based on the current underwhelming home sales pace at a time of consistent job growth, there could be sizable pent-up demand if mortgage rates decline,” NAR Chief Economist Lawrence Yun said in a statement.

Supply builds

NAR’s data show the supply of homes on the resale market increased 4.6% from a year earlier to 1.59 million, the most for any October since 2019. That represents 5.1 months of supply at the current sales pace, the highest since late 2015.

The median sales price increased 0.4% from a year ago — the smallest annual advance since February — to $416,700.

Housing was a key component of the affordability crisis that helped sweep Democrats to power in the midterm elections. NAR’s housing affordability index, which measures whether a typical family earns enough to qualify for a mortgage for a median-priced home, decreased to the lowest level since mid-2025.

The NAR report also showed sales of existing condominiums slid to the lowest level in records back to 1999.

Separate data out Thursday showed applications for unemployment benefits rose last week to 200,000 but held close to historically low levels.

(With assistance from Laura Yin.)

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