Sales of existing homes in the United States fell to their lowest level in more than 16 years in October, as high mortgage rates continued to keep buyers on the sidelines.

Existing-home sales dropped 5.5% in October to a seasonally adjusted annual rate of 3.75 million units, the National Association of Realtors said on Thursday, 12 November. That is the lowest since August 2010, and 8.8% below the same month a year earlier.

The result was worse than expected. Economists polled by Reuters had forecast sales of 3.85 million units, so the actual figure came in below what the market was hoping for.

01. High rates are squeezing buyers

The main problem is the cost of borrowing. The average rate on a 30-year fixed mortgage was 7.33% in October, near its highest level since 2000. At that level, monthly payments are far higher than they were a few years ago, and many would-be buyers simply cannot afford to move.

Sellers are also staying put. Many homeowners locked in much lower mortgage rates in earlier years, and selling now would mean giving up a cheap loan and taking on a far more expensive one. That has kept the number of homes for sale low, even as demand has cooled.

Inventory did rise slightly, up 1.3% to 1.59 million units, which works out to 5.1 months of supply at the current sales pace. But that is still a tight market by normal standards, and it has kept prices from falling.

02. Prices hold up despite weak sales

The median price of an existing home was $416,700 in October, up 0.4% from a year earlier. So while far fewer homes are changing hands, the homes that do sell are still fetching slightly more than they did last year.

It is worth remembering how these figures are counted. Sales are recorded at closing, so October’s sales mostly reflect contracts signed in August and September, when mortgage rates were already high.

For now, there is little sign of a quick turnaround. Until borrowing costs come down meaningfully, or more homes come onto the market, the US housing market looks set to stay slow, with buyers waiting and sellers holding on.