(Bloomberg) -- Sales of previously owned US homes fell by the most in nearly a year in October, highlighting the toll elevated mortgage rates and still-high prices continue to take on the resale market.

Contract closings decreased 4.1% from a month earlier to a 3.79 million annualized pace, still the lowest since 2010, National Association of Realtors data showed Tuesday. The figure was weaker than all but one estimate in a Bloomberg survey of economists.

The combination of soaring mortgage rates and stubborn prices has been discouraging buyers and sellers alike. However, with mortgage rates retreating as the Federal Reserve nears the end of its tightening cycle, that’s offering some hope that the housing market may be bottoming out.

“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” said Lawrence Yun, NAR’s chief economist. “Though limited now, expect housing inventory to improve after this winter and heading into the spring.” 

The median selling price climbed 3.4% from a year earlier to $391,800, the highest for any October in data back to 1999. Yun added that nearly a third of homes sold above their list price, indicating that multiple offers are still occurring — particularly on starter and mid-priced homes.

Even though the number of homes for sale ticked up from a month earlier to 1.15 million, it’s still the lowest for any October in the series. At the current sales pace, it would take 3.6 months to sell all the properties on the market. Realtors see anything below five months of supply as indicative of a tight market.

The NAR’s report showed 66% of homes sold were on the market for less than a month. Properties remained on the market for 23 days on average in October, up slightly from September.

Existing-home sales account for the majority of US housing and are calculated when a contract closes. Data on new-home sales, which make up the remainder and are based on contract signings, are due next week.

--With assistance from Chris Middleton, Cécile Daurat and Marien Lopez Medina.

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