Pending home sales are at a 20-year low
As mortgage rates rise in the minds of homebuyers, fewer people are buying homes.
Danny Romero from Yahoo Finance reports:
Contract signings for existing homes hit their slowest pace in more than two decades in October.
Home sales under contract fell 1.5% from the previous month, according to the National Association of Realtors on Thursday. The index reading of 71.4 is the lowest since the index was established in 2001. The index level of 100 is equivalent to the pace of contract activity in 2001.
However, the results were better than the 2.0% decline that Bloomberg economists had expected, and come after a larger decline in new home sales in the same month.
The decline in the index, the main measure used to assess the health of the housing market, still reflects how a rise in interest rates in October unnerved budget-sensitive buyers again and pushed pending sales in the resale market down 8.5% annually.
“Prices were hovering around 8% in October. They were the highest in 23 years, pushing affordability to a record low. “We will see pending home sales decline accordingly in October.”
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