October Pending Home Sales Down 4.6%
Pending home sales slid for the fifth consecutive month in October, the National Association of Realtors reported Wednesday. Three of four U.S. regions recorded month-over-month decreases, and all four regions recorded year-over-year declines in transactions.
The Pending Home Sales Index (www.nar.realtor/pending-home-sales), a forward-looking indicator of home sales based on contract signings, fell by 4.6% to 77.1 in October. Year-over-year, pending transactions fell by 37.0%.
Regionally, in the Northeast, pending sales fell by 4.3% from September to 68.7 and fell by 29.5% from a year ago. In the Midwest, pending sales increased by 3.3% to 83.5 in October but fell by 32.1% from a year ago.
In the South, pending sales fell by 6.4% to 90.6 in October and fell by 38.2% from the prior year. In the West, pending sales fell by 11.3% in October to 55.6 and fell by 46.2% from a year ago.
“October was a tough month for home buyers, as mortgage rates hit the highest level in over two decades,” said Odeta Kushi, Deputy Chief Economist with First American Financial Corp. Santa Ana, Calif. “However, mortgage applications data thus far in November point to home buyers returning to the market as rates have recently slipped from their peaks in October.”
Even so, Kushi noted, “the housing industry is not through the storm yet. Rates will remain high and could even move higher until there is sustained evidence that inflation is receding. Higher mortgage rates keep buyers and sellers on the sidelines.”
“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,” said NAR Chief Economist Lawrence Yun.