U.S. Pending Home Sales Falls to Lowest Level on Record in September

Dow Jones
Oct 20

The number of homes going under contract in the U.S. fell more than expected in September as fast-rising mortgage rates locked out potential home buyers. Here are the main takeaways from the National Association of Realtors' report.

--The pending home sales index, a leading indicator of house sales based on contract signings, fell 7.3% in September to 66. This was the lowest reading ever recorded in the history of the pending home sales index, which began in 2001, said Nadia Evangelou, principal economist for NAR.

--Economists polled by The Wall Street Journal had forecast a 0.4% decline.

--"Market conditions weakened in September due to fast-rising mortgage rates," said NAR Chief Economist Dr. Lawrence Yun. "Although job growth and income gains can support home purchases, housing affordability is more affected by changes in mortgage rates."

-The West had the largest decrease, falling 9.2% month-over-month. Over the month, pending home sales fell 8.2% in the South region, 6.5% in the Midwest region and 4.2% in the Northeast.

-On the year, pending home sales fell 11.3%, the NAR said.

-"Given that mortgage rates have already risen much more than the Federal Reserve's short-term interest rate hikes, mortgage rates could be topping out," Yun added.

 
 

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