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The National Association of Realtors reported Friday that provisional home sales for September fell 10.2 percent from the previous month to 79.5.
This is the fourth consecutive month of decline. Pending home sales have fallen in 10 of the past 11 months.
Economists had expected an unexpected drop in September home sales of 4.0%. The PHSI fell 31.0% for the year, marking the 16th consecutive month of declines.
An index of 100 equals the level of activity in the 2001 contract. “Continued inflation has hurt the housing market,” said Lawrence Yun, chief economist at NAR. “The Fed had to raise interest rates sharply to contain inflation, which squeezed buyers and sellers.”
CEO Yun said the number of new listings is down from a year ago because many existing homeowners are unwilling to give up mortgages of 3.0% or less.
Director Yoon added, “The new benchmark for mortgage interest rates will be around 7% for now.” “For a $300,000 loan, a typical monthly mortgage payment is about $2,000. That’s a difference of more than $700 a month from $1,265 a year ago.
When inflation is contained, mortgage interest rates are low and people’s purchasing power increases. Homes for Buyers”.
All four major US regions saw a year-over-year decline in contract signings. The biggest drop was in the western region, from 38.7% to 62.7%. Monthly sales were 8.1%, 16.2%, 8.8%, and 11.7% in the West and the South (97.0), Northeast (64.2), and Midwest (80.7).
George Ratiu, the chief economist at Realtor.com, said the pain will continue for a while.
“If you look at the rest of the year, you can expect interest rates to continue to rise,” he said. “The Fed’s tightening monetary policy has not yet curbed inflation, which means banks should raise interest rates further.”
Reference Source: Housingwire
