Home sales in the US are at their lowest level since 2016
US home sales dropped 5.5 percent in October to a seasonally adjusted annual rate of 3.75 million units, the lowest level since August 2010.
Sales of previously owned homes in the US have hit their lowest level since 2010 as mortgage rates hover above 7 percent. The National Association of Realtors (NAR) reported that sales decreased by 8.8 percent year-over-month, with declines in the Midwest, South and West regions.
Market Conditions
The average 30-year fixed-rate mortgage was 7.33 percent in October, up from 6.86 percent in September and 6.25 percent one year ago, according to Freddie Mac. Despite a slight decrease to 7.18 percent last week, rates remain at historically high levels.
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.
Impact on Buyers
First-time buyers accounted for just 29 percent of home purchases in October, down from 31 percent in September and 32 percent in October last year. Historically, first-time buyers have made up closer to 40 percent of home sales.
Despite fewer transactions, the report noted that 88 million homeowners across the country are largely in a comfortable financial position due to sizable housing wealth accumulation.
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