Trump gets another ugly economic report as key figure hits 16-year low

U.S. President Donald Trump gestures during an event at The Villages Charter School at The Villages, Florida, U.S., May 1, 2026. REUTERS/Nathan Howard

President Donald Trump has received another ugly report on the economy, with existing-home sales plunging to their lowest level in over 16 years amid soaring, war-fueled inflation that has driven mortgage rates close to levels not seen in a quarter-century, the Financial Times reports.

The National Association of Realtors (NAR) reported that existing-home sales fell 5.5 percent in October compared to the previous month, to a seasonally adjusted annual rate of 3.75 million. It was the lowest sales rate since August 2010, when the U.S. was recovering from the housing crash, and less than the 3.85 million rate predicted by economists.

NAR chief economist Lawrence Yun blamed the drop on mortgage rates. Home buying, he said, “is difficult when mortgage rates have climbed to their highest levels since 2000,” excluding one month in 2023.

The high inflation is due to Trump’s war with Iran. The FT reports that the rise in energy prices triggered by the conflict has led to higher inflation, which has caused an increase in Treasury yields and also mortgage rates. In early October, mortgage rates rose to 7.5 percent, a three-year high, although they have since declined a bit. The yield on the 30-year Treasury is over 5.4 percent, a far cry from the rates seen before the pandemic. That has left some Americans unable to afford mortgages for new purchases or refinancing.

Earlier this year, Trump announced the government would purchase $200 billion in mortgage bonds in order to lower rates, the Washington Examiner reported. But according to a June analysis by the liberal Center for American Progress, the war has actually raised long-term rates by an estimated half a percentage point.

Other signs in the housing market also appear grim. The pending home sales rate, which measures signed but not yet closed sales contracts, hit a record low in September. The number of unsold homes on the market is also on the rise, with housing inventory at 1.59 million units, or 5.1 months of supply in October, according to the NAR. Analysts at Barclays and JPMorgan said that the months-of-supply figure is the highest seen in over a decade.

In September, the Federal Reserve, which Trump has repeatedly pushed to cut rates during his presidency, hiked its benchmark interest rate for the first time in three years to combat inflation. Futures markets show that a quarter-point rate hike next month, and another hike by March, are fully priced in.

Analysts at Jefferies said that home sales tend to lag behind shifts in mortgage rates, so the rise in rates in October is not likely to be fully reflected in the home sales data until November and December, with further weakness possible.

The housing figures come amid a difficult time for the White House. Voter anger over affordability was a key factor in the Democrats’ victory in the midterms last week, according to the FT, and the existing-home sales data is unlikely to ease voters’ concerns.

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