Home sales numbers released Tuesday offered more sobering news: The number of existing homes sold continued their fall to levels last seen during the fallout of the Great Recession. At the same time, prices remain stubbornly high amid the highest mortgage rates in 23 years.

The National Association of Realtors reported that existing-home sales in October dropped below economists projections to 3.79 million. The median price last month ticked up to $391,800 – a 3.4% increase from 2022 but a 6.3% decline from September.

Since 2000, annualized home sales figures averaged about 5.3 million each month. Only three other months – all following the 2007-08 financial crisis – registered lower sales than October, including July 2010 which set the low watermark of 3.45 million.

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The number of homes sold has been tumbling since 2022 when the Fed announced its plans to raise interest rates in an effort to tame 40-year high inflation. Mortgage rates have more than doubled since and, in turn, increased monthly payments for new homeowners.

The contraction in the housing market hasn't been as pronounced in every region or every price point, but all have seen declines since 2022.

Existing home sales decline from last year in all regions

Existing-home sales fell from October 2022 and last month in every region – except for the Midwest. Sales in the Midwest were unchanged from September but fell 13.9% from last year.

Why home sales are continuing to fall

Housing experts have speculated in recent months that handful of issues have kept prices high and deterred would-be purchasers. Among them:

• Elevated prices. October's median sales price of $391,800 is among the top 11 months since 2000 and, of the bunch, these past two months are the only fall months – when prices tend to ebb.
• Tight inventories: There's a 3.5-month supply of houses on the market based on the current sales pace. A better balanced home market between buyers and sellers would have a 4- to 5-month supply. One potential sign of softening: Average days on the market rose from October 2022 by a couple days to 23.
• High mortgage rates: Homeowners who took advantage of historically low mortgage rates in recent years are not interested in taking on new mortgages, which might be more than double their current rates.

Freddie Mac reported on Thursday that the average 30-year mortgage rates have fallen to 7.44%. Rates, which might have peaked at the end of the month, appeared to deterred some buyers in October, according to the NAR report. All-cash sales rose from 26% last year to 29% in October, while the percentage of first-time buyers, the next biggest group, was unchanged.

Will interest rates continue to move higher?

Fed Chairman Jerome Powell and other Fed presidents continue to say that we shouldn't expect a reduction in interest rates any time soon. That said, nearly all investors who bet on the movements of interest rates expect the Fed will hold interest rates steady following its next meetings in December and January, according to the CME FedWatch Tool.