Sales of previously owned homes in the US have hit the lowest level since 2010 as mortgage rates hover above 7 percent.

The National Association of Realtors (NAR) said on Thursday that home sales dropped 5.5 percent in October to a seasonally adjusted annual rate of 3.75 million units. That was the lowest level since August 2010.

“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023. As a result, home sales fell to their lowest level since August 2010,” said NAR Chief Economist Lawrence Yun.

He said, “It is just a tough market for buyers and sellers.”

“Sales decreased by 8.8 percent year-over-year,” the NAR report found. “Month-over-month sales declined in the Midwest, South and West and held steady in the Northeast. Year-over-year sales declined in all four regions.”

The home sales used in the report are counted at the closing of a contract and are a look at previously occupied ones. October’s sales likely reflected contracts signed in August and September.

“Despite fewer transactions in October, the 88 million homeowners across the country are largely in a comfortable financial position due to sizable housing wealth accumulation,” said the report.

First-time buyers accounted for just 29 percent of home purchases last month, down from 31 percent in September and 32 percent in October last year, NAR said. First-time buyers have historically made up closer to 40 percent of home sales.

The US housing market has been in a slump since 2022, when mortgage rates increased from pandemic-era lows. Sales of previously occupied US homes were essentially flat last year, stuck at a 30-year low. Yun expects home sales this year will likely end up lower than in 2025.

The average 30-year fixed-rate mortgage was 7.33 percent in October, according to the Federal Home Loan Mortgage Corporation, more commonly known as Freddie Mac, up from 6.86 percent in September and 6.25 percent one year ago.

The rate, however, averaged 7.18 percent last week, down from 7.24 percent in the previous week.

Rates on home loans are influenced by inflation, Federal Reserve policy and bond-market investors’ expectations for the economy, among other factors. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Until the past few weeks, mortgage rates had been on the rise since late February, when the US war with Iran began, pushing up the price of oil and driving inflation higher. The run-up in rates also reflected heightened bond market volatility, which led to rising yields on US Treasuries.