Pending home sales continued their downward spiral in October as rising mortgage rates reduced buyer trust. Check out NAR’s latest home sales report for more details.
Pending home sales dropped for five consecutive months as rising mortgage rates caused many housing markets to shut down. Now that rates appear to have stabilized, economists believe more homebuyers–particularly first-timers–could gradually return to the market.
Contract signings fell 4.6% year-on-year in October, the National Association of REALTORS(r) reported Wednesday. Contract signings experienced their biggest decrease ever during October as average mortgage rates reached 20-year highs at nearly 7%; last week however, 30-year fixed-rate loans averaged 6.588% according to Freddie Mac – marking two consecutive weeks of declines for this loan type.
“The West region was particularly hard hit by high interest rates and expensive home prices,” according to NAR Chief Economist Lawrence Yun. Only Midwest saw some improvement; buyers should return in subsequent months as mortgage rates appear to have already peaked and began dropping since mid-November.”
