Sales of previously owned homes in the United States dropped by 4.1% in October compared to September, reaching an annualized rate of 3.79 million units, according to the National Association of Realtors. This marked the slowest sales pace since August 2010, with sales down 14.6% year-over-year. Analysts had predicted a smaller decline to 3.9 million units.

The decrease in sales was attributed to a persistent lack of housing inventory and the highest mortgage rates in a generation, according to Lawrence Yun, the NAR’s chief economist. Despite the challenges, multiple offers are still occurring, especially on starter and mid-priced homes, while price concessions are happening in the upper end of the market.

At the end of October, there were 1.15 million homes for sale, which is 5.7% lower than the previous year. This reduced supply has put pressure on prices, with the median price of an existing home in October reaching $391,800, a 3.4% increase from the previous year. Roughly 28% of homes sold above list price.

Higher end homes priced above $1 million saw an increase in sales, up just over 9% from a year ago. First-time buyers represented only 28% of October sales, unchanged from a year ago, while individual investors bought 15% of the homes, down from 18% in September.

In summary, the housing market in the United States experienced a decline in sales of previously owned homes in October, driven by factors such as a lack of housing inventory and high mortgage rates. This has resulted in increased competition in the market, particularly for starter and mid-priced homes, and rising prices across all regions of the country.