Pending home sales, a measure of signed contracts for existing homes, fell 1.5% in October from September.
It’s the lowest level since the National Association of Realtors began tracking this metric in 2001, meaning it’s even worse than readings during the financial crisis more than a decade ago. Sales were 8.5% lower than in October last year.
As the index measures signed contracts, it is the most recent indicator of housing demand. It reflects buyers who were out shopping in October, when the popular 30-year fixed mortgage rate briefly spiked above 8%.
Rates have since fallen back to around 7.3%, according to Mortgage News Daily. Estate agents continue to say that it’s not just high interest rates, but a still very low supply of homes for sale that is dampening activity.
“The consecutive declines in mortgage rates in recent weeks will help qualify more homebuyers, but limited housing inventory is significantly preventing housing demand from being fully satisfied,” Lawrence Yun, chief economist for the NAR, said in a release. “Multiple offers, of course, only produce one winner, leaving the rest to continue their search.”
Pending sales fell month-over-month in all regions except the Northeast. They fell the most in the West, where homes are most expensive. Compared to a year ago, sales were down everywhere.
Tight supply and still strong demand have kept pressure on house prices, which are not only continuing to reach new highs, but appear to be accelerating their gains.
Realtors noted that sales of homes priced above $750,000 have increased simply because there is more supply at the top end of the market.
