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# Existing-Home Sales Fall 4.1% to 3.79 Million, Lowest Since 2010, as Mortgage Rates Squeeze Buyers and Sellers
- URL: https://www.theamericanquorum.com/taq-historical-2023-11-25-us/
- Published: 2023-11-26T04:59:00.000Z
- Updated: 2023-11-26T04:59:00.000Z
- Description: October existing-home sales fell to a 3.79 million annual rate, down 14.6% from a year earlier, while prices rose and mortgage rates remained above 7%.
- Author: TAQ Staff
- Tags: US, #Import 2026-09-01 08:00

U.S. existing-home sales fell **4.1% in October to a seasonally adjusted annual rate of 3.79 million**, the weakest pace since August 2010, as high borrowing costs and limited inventory continued to freeze much of the housing market. The [National Association of Realtors](https://www.globenewswire.com/news-release/2023/11/21/2784172/0/en/Existing-Home-Sales-Receded-4-1-in-October.html?ref=theamericanquorum.com) said Tuesday that sales were 14.6% below their level a year earlier.

The downturn is unusual because falling transaction volume has not produced falling national prices. The median existing-home price rose 3.4% from a year earlier to **$391,800**, while available inventory remained below year-ago levels. Buyers face the combination of high prices and mortgage rates above 7%, and many current homeowners have little incentive to sell because moving would mean giving up mortgages obtained at far lower rates.

## The market is frozen by affordability and the 'lock-in' effect

Inventory at the end of October stood at 1.15 million homes, up modestly from September but down 5.7% from a year earlier. That represented only 3.6 months of supply at the current sales pace. NAR Chief Economist Lawrence Yun said prospective buyers faced both the highest mortgage rates in a generation and a persistent shortage of homes for sale.

Mortgage costs have begun to retreat from October's peak, but they remain historically restrictive. A [November 22 analysis](https://www.realtor.com/research/freddie-mac-mortgage-rates-nov-22-2023/?ref=theamericanquorum.com) of Freddie Mac's weekly survey put the average 30-year fixed rate at 7.29%, down 15 basis points from the previous week and below the 7.79% level reached in late October. Even after that decline, the cost of financing a home remains dramatically higher than it was two years ago.

The mechanism is working on both sides of the transaction. Higher rates reduce what new buyers can afford each month. At the same time, millions of owners who refinanced or bought during the low-rate period have mortgages well below current market rates. Selling would often mean financing the next house at double the interest rate, creating a powerful financial reason to stay put.

## Demand has weakened, but prices still rise

The mismatch between low demand and even lower supply helps explain why home prices are climbing despite the sales slump. NAR reported that all four major regions posted year-over-year price increases in October, while all four experienced lower sales from a year earlier. Properties typically remained on the market for 23 days, and two-thirds of homes sold in less than a month.

Mortgage applications show some response to the recent decline in rates. The Mortgage Bankers Association's [weekly survey](https://newslink.mba.org/mba-newslinks/2023/november//mba-weekly-survey-nov-22?ref=theamericanquorum.com) reported that overall applications rose 3.0% in the week ending November 17 and purchase applications increased 4%. But purchase applications remained 20% below the same week a year earlier, showing that a few weeks of rate relief have not reversed the broader affordability problem.

Fannie Mae's [November housing outlook](https://www.fanniemae.com/research-and-insights/forecast/economic-developments-november-2023?ref=theamericanquorum.com) expects total home sales to remain depressed, forecasting about 4.8 million combined sales in 2023 and 4.7 million in 2024\. Its economists expect mortgage rates to decline gradually, but they also anticipate the lock-in effect will limit the speed of any recovery in existing-home transactions.

## New construction is holding up better than resale activity

The supply shortage is creating a striking divergence between existing homes and new construction. Builders can offer newly created inventory and, in some cases, use financing incentives or rate buy-downs that individual sellers cannot. That gives the new-home market an advantage even while the broader housing sector remains under pressure.

The Census Bureau's [historical construction releases](https://www.census.gov/construction/nrc/data/releases.html?ref=theamericanquorum.com) show October housing starts at an annual rate of roughly 1.37 million, with single-family starts near 970,000\. Permits also rose from September. New construction is not booming, but it is proving more resilient than existing-home turnover because builders are responding directly to the shortage of properties available for purchase.

Builders themselves remain cautious. The National Association of Home Builders' [November survey](https://www.nahb.org/news-and-economics/press-releases/2023/11/builder-sentiment-down-again-but-better-building-conditions-are-in-view?ref=theamericanquorum.com) put its Housing Market Index at 34, down six points for a fourth consecutive monthly decline. NAHB said mortgage rates that approached 8% had damaged buyer traffic and builder sentiment even though recent inflation data and bond-market moves offered hope for lower financing costs.

## Housing now transmits monetary policy through reduced mobility

The Federal Reserve's rate increases are intended to slow demand and inflation, and housing is one of the most interest-sensitive parts of the economy. But the current cycle is producing an additional effect: reduced mobility. Instead of only lowering prices through weaker demand, higher rates are discouraging existing owners from listing homes, constraining supply and supporting prices.

That creates a difficult environment for first-time buyers and households that must move for work or family reasons. A buyer can negotiate on price, choose a smaller property or increase a down payment, but none of those options fully offsets the change in monthly payment created by moving from a 3% mortgage environment to one above 7%.

The market could loosen if mortgage rates fall substantially, because lower financing costs would improve purchasing power and reduce the penalty for current owners who sell. But a rate decline could also release pent-up buyer demand before inventory recovers, limiting downward pressure on prices.

October's 3.79 million sales pace captures the result of those competing forces. Transactions have fallen to levels not seen in 13 years, yet prices remain firm because the supply of homes available for sale is also constrained. Housing is not experiencing a conventional price collapse. It is experiencing a market freeze in which high rates make it harder both to buy a home and to persuade existing owners to sell one.