By Xavier Fontdegloria
The number of houses going under contract in the U.S. declined again in October as rapidly rising mortgage rates and low affordability hurt demand, data from the National Association of Realtors showed Wednesday.
–The Pending Home Sales Index, a leading indicator of home sales based on contract signings, fell 4.6% on month, to 77.1, in October. This is close to the level seen in April 2020, when the index fell to 70.0 amid Covid-19 pandemic trough.
–Economists polled by The Wall Street Journal expected the index to decline 5.5% on month.
–Pending home sales were 37% below the same month a year earlier.
–“October was a difficult month for home buyers as they faced 20-year-high mortgage rates,” said Lawrence Yun, NAR’s chief economist. The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November, he said.
–Pending home sales dropped in three of the four major U.S. regions. Transactions fell the most in the West, by 11.3% on month, followed by a 6.4% decline in the South and a 4.3% drop in the Northeast. Pending home sales increased 3.3% in the Midwest.
Write to Xavier Fontdegloria at [email protected]
