WASHINGTON, Oct 20 (Reuters) – Contracts to purchase previously owned US homes plunged to a record low in September as rising mortgage rates depressed demand for housing.
The pending home sales index tumbled 7.3% to 66.0 last month, the lowest level since the series started in 2001, the National Association of Realtors said on Tuesday. Economists polled by Reuters had forecast contracts, which become sales after a month or two, slipping 0.5%.
“Market conditions weakened in September due to fast-rising mortgage rates,” said Lawrence Yun, the NAR’s chief economist.
Contracts fell in all four regions. Pending home sales dropped 11.3% year-on-year in September.
Mortgage rates have accelerated in recent weeks, with the 30-year fixed rate averaging 7.40% last week, the highest level in nearly three years, data from mortgage finance firm Freddie Mac showed. The higher borrowing costs, which are tracking Treasury yields as the US-Israeli war with Iran fans inflation, are depressing home sales.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
