American home sales have collapsed to their weakest level in 16 years as mortgage rates climb back to heights not seen in nearly three years.
Existing home sales fell to a 3.75 million annual rate in October, down 8.8 percent from a year earlier and the slowest pace since August 2010, while the median price of a previously owned home edged up to 416,700 dollars.
Sales dropped across the Midwest, South and West, with the Northeast the only region to hold steady.
The 30-year fixed mortgage, the backbone of US home lending, now sits near 7.18 percent, just shy of its 7.79 percent peak in 2023 and more than double the roughly 3 percent average of the pandemic years. Rates had fallen below 6 percent as recently as February before fresh inflation and a Federal Reserve that raised borrowing costs in September for the first time since 2023 pushed them back up.
The policy rate now stands between 3.75 and 4 percent, with another increase expected next month after October inflation ran hotter than forecast.
Contract signings, the earliest signal of future closings, hit their lowest level on record in September, the same month the 30-year rate broke 7 percent for the first time in nearly two years, leaving buyers facing the toughest borrowing costs since 2000 outside a single month in 2023.