U.S. existing-home sales fell 5.5% in October, sinking to their lowest level since August 2010, the National Association of Realtors reported Thursday. The seasonally adjusted annual rate landed at 3.75 million units, down 8.8% from a year earlier — and the mechanism behind the freeze is easy to name: borrowing costs.

Why did sales collapse?

Mortgage rates. The average 30-year fixed mortgage rate hit 7.33% in October, NAR said, up from 6.86% in September and 6.25% a year earlier. That's the highest level since 2000, aside from a single month in 2023.

NAR Chief Economist Lawrence Yun said in a statement: "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."

Simple arithmetic. A buyer financing the median home at 7.33% faces a monthly payment far above what the same house cost a year ago. So buyers step back. Sellers, many of whom locked in far cheaper rates, stay put. The market thins.

What do the regional numbers show?

The weakness was broad, though not uniform. From September, sales fell in three of four regions and held steady in the Northeast. Against a year earlier, all four regions declined.

• West: down 9.7% from September to a 650,000 annual rate; down 14.5% year over year — the sharpest regional drop
• South: down 6.5% to 1.73 million
• Midwest: down 3.2% to 900,000
• Northeast: unchanged at 470,000

Single-family home sales fell 5.8% from September to a 3.41 million annual rate. Condo and co-op sales fell 2.9% to 340,000.

Are prices still rising?

Yes, barely. The median existing-home price was $416,700, up 0.4% from a year earlier. That marks the 40th consecutive month of year-over-year price gains — a remarkable streak set against the weakest sales pace in fourteen years.

Supply, meanwhile, is loosening at the margin. Total housing inventory stood at 1.59 million units, up 4.6% from October 2025. That equals a 5.1-month supply (the number of months needed to sell all listings at the current pace), compared with 4.7 months in September and 4.4 months a year earlier.

Properties spent a median of 35 days on the market, up from 33 days in September and 34 days a year earlier. Homes are sitting longer. Not dramatically, but the direction is clear.

Who is still buying?

The composition of buyers is shifting. First-time buyers accounted for 29% of sales, down from 31% in September and 32% a year earlier. Entry-level demand is eroding fastest, as elevated rates bite hardest on households without equity to trade in.

Cash sales made up 29% of transactions, up from 27% in September — a sign that investors and wealthier buyers, untouched by mortgage math, are taking a larger share of a shrinking market. Distressed sales held at 2% of transactions, unchanged from a month earlier.

Is affordability getting worse?

It is, everywhere. NAR's Housing Affordability Index (a measure where 100 means the median-income family qualifies for the median-priced home) came in at 100.7, down from 107.3 a year earlier. Affordability declined in all four regions.

Was this drop expected?

Partly. NAR's pending home sales data, released in October, had already signaled weakness. Pending sales fell 7.3% in September from August and 11.3% from a year earlier, with the index at 66.0 — a record low for a series dating to 2001. Yun said at the time that buyers and sellers might be holding back until mortgage rates move favorably.

What happens if rates fall?

Yun points to a reservoir of demand. The sales pace comes at a time of consistent job growth, he noted, and "there could be sizable pent-up demand if mortgage rates decline."

That's the strategic picture for anyone watching housing: employment supports household formation, prices haven't cracked, and the bottleneck is purely financing costs. Cut the 7.33% rate and the equation changes. Until then, expect more months like October.