Joel Berner says October home sales hit 16-year low

The National Association of Realtors reported that existing home sales fell to 3.75 million units in October. This figure represents an 8.8% decline from the same month last year. It is the lowest monthly total recorded in 16 years.

Joel Berner, senior economist at Realtor.com, described the data as a punch in the gut. He noted that analysts expected a soft month but not the softest since 2010. The market has been stagnant for more than four years, but this drop marks a sharp break in that pattern.

High mortgage costs drove the decline. The average rate for a 30-year fixed mortgage reached 7.40% in October. That is the highest level since 2023. Rates have fallen slightly since then but remain well above their level from a year ago.

Higher inflation and bond yields contributed to the rate increases. The Federal Reserve also raised its benchmark interest rate in September. This move was intended to make borrowing more expensive. Fewer home sales reduce overall economic activity, which helps the Fed lower inflation.

Fed policymakers signaled that another rate hike could occur in December. Such a move would likely slow the housing market further. Berner said the strategy might seem harsh but serves the long-term goal of controlling inflation.

The data shows a direct link between borrowing costs and buyer activity. The October figures confirm that high rates continue to suppress demand in the existing home sector.