US pending home sales plunge to record low in September

By Mucahithan Avcioglu

ISTANBUL (AA) - Pending sales of existing homes in the US fell to their lowest level on record in September as rising mortgage rates weighed on demand, according to data released Tuesday by the National Association of Realtors.

The Pending Home Sales Index, which tracks signed contracts to purchase existing homes, dropped 7.3% from the previous month to 66, its lowest reading since records began in 2001.

The decline was considerably steeper than market expectations for a 0.5% decrease.

Pending home sales fell 11.3% from a year earlier, the association said, with all four major US regions seeing both monthly and annual declines.

“Market conditions weakened in September due to fast-rising mortgage rates,” said National Association of Realtors Chief Economist Lawrence Yun.

Yun said employment and income growth could support home purchases, but changes in mortgage rates had a greater impact on affordability.

The West saw the sharpest monthly decline in contract signings, at 9.2%, followed by an 8.2% drop in the South, the country's largest home-selling region.

Higher borrowing costs have added to affordability pressures for prospective buyers, while elevated home prices continue to constrain demand.

Yun said the limited supply of distressed properties was helping keep prices steady, even as buyers face difficulties obtaining mortgages. He suggested buyers and sellers could be delaying transactions while waiting for more favorable rates.

Pending home sales are a forward-looking indicator of the housing market, with signed contracts generally preceding completed transactions by one to two months.

Mücahithan Avcıoğlu