Pending Home Sales Hit a Record Low in September

Signed contracts on existing homes fell to a record low in September. The National Association of Realtors' Pending Home Sales Index dropped 7.3% from August to 66.0, the lowest reading since the index began in 2001. It was down 11.3% from a year earlier. Pending sales count contracts, not closings, so they show where sales are heading over the next month or two.

Every region fell. The West dropped the most from August, down 9.2%, and was 15.0% below a year ago. The South fell 8.2% for the month and 12.0% for the year. The Midwest was down 6.5% and 8.7%, and the Northeast 4.2% and 9.4%.

"Market conditions weakened in September due to fast-rising mortgage rates," said Lawrence Yun, chief economist at NAR. The 30-year fixed rate averaged 7.40% last week, according to Freddie Mac, the highest in nearly three years. Yun said rates may be close to a peak, but energy prices and inflation make the outlook uncertain. A small supply of distressed homes has kept prices from falling.

Brokers say the slowdown now reaches buyers who have already qualified. Kevin Oto, broker and owner at Green Haven Capital, said buyers who clear every financial hurdle still stall at the last step, and those are some of his hardest conversations. Samantha Shelton, president of Align Lending, warned that waiting has its own risk: "if rates drop significantly, prices will jump fast."

It follows other signs of a slowing market. Earlier this month, the Mortgage Bankers Association said new home sales fell to their slowest pace since 2020.

For agents, the practical point is to protect the deals you have. With buyers getting cold feet late, check in more often between contract and closing, keep your lender partner close, and have a plan ready if a buyer wants out. For new listings, expect fewer offers and longer days on market, and set the seller's expectations before the sign goes up. The figures were first reported by Mortgage Professional.