WASHINGTON (AP) – Sales of previously owned homes took a sharp downturn in October, dropping to a 13-year low, according to the National Association of Realtors. The decrease in sales reflects ongoing challenges in the housing market.

Analysts had anticipated a smaller decline, but the actual numbers revealed a 4.1% decrease from September, with a seasonally adjusted annualized rate of 3.79 million units. This slow pace of sales hasn’t been seen since August 2010. Year-over-year, sales were down by 14.6%.

The decline in sales can be attributed to a combination of factors, including the persistent lack of housing inventory and historically high mortgage rates. Lawrence Yun, NAR’s chief economist, noted that even with the difficulties, multiple offers are still occurring, particularly for starter and mid-priced homes.

At the end of October, there were only 1.15 million homes for sale, a 5.7% drop from the previous year. This scarcity of inventory has placed upward pressure on prices, with the median price of an existing home reaching $391,800, an increase of 3.4% from the previous year.

Despite the challenges for buyers, home sellers have seen significant gains, with prices continuing to rise year-over-year. Homes priced above $1 million saw an increase in sales of over 9% from the previous year, as wealthier buyers are less sensitive to monthly rate changes.

First-time buyers represented 28% of October sales, unchanged from the previous year and still significantly lower than the historical 40% share they have represented. Individual investors bought 15% of the homes, down from 18% in September and 16% from a year ago. All-cash deals made up 29% of sales, up from 26% in October 2022.

In summary, the housing market is facing challenges due to low inventory and high mortgage rates, leading to a decrease in sales and an increase in home prices. These factors continue to impact different segments of the market, with both buyers and sellers navigating a competitive and constantly changing landscape.