Pending Home Sales Hit Lowest Level Since 2001
Recent data reveals that pending home sales in October dropped to their lowest level since 2001, when the National Association of Realtors (NAR) began tracking housing activity. A variety of factors contributed to this decline, including elevated mortgage rates, high home prices, and low inventory levels.
Details of the Report
According to NAR’s monthly report, contract signings fell by 1.5% from September to October. Pending deals also experienced an 8.5% year-to-year drop, with NAR’s index falling to 71.4 – the lowest level reported since the organization began tracking this metric in 2001.
Factors Contributing to the Decline
Several familiar market foes have contributed to the lack of activity in the housing market. October saw some of the highest mortgage rates in decades, hovering around a dreaded 8% threshold. However, mortgage rates have slightly decreased in recent weeks, providing a small bright spot amidst other factors continuing to hamstring the housing market.
NAR chief economist Lawrence Yun explained, “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied.”
All four regions tracked by NAR recorded year-over-year declines in pending home sales, with three of the four also reporting month-to-month drops. The exception was the Northeast, which saw a 2.7% increase from September (despite dropping 6.5% from the previous year). Yun noted that home sales were rising in areas with more inventory.
Home Prices as an Obstacle
Even when homebuyers can find an acceptable mortgage rate and an available home, prices remain another obstacle to ownership. In September, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index rose 3.9% annually, 1.4 percentage points above the yearly gain recorded in August.
Home prices also reached a record high in September due to a lack of inventory. Price growth is expected to moderate in the October index results after mortgage rates peaked ahead of Halloween.
Impact on the Real Estate Market
The decline in pending home sales and the various challenges faced by homebuyers highlight the importance of staying informed and adapting to market changes for real estate professionals. By staying up-to-date with industry trends and developments, you can ensure you continue to provide top-notch service to your clients.
Explore our range of resources and services at Jessica Fulk Real Estate to learn more about the real estate industry. Whether you’re looking to sell a home, buy a home, or simply stay informed about the latest industry trends, we’re here to help.
Orginal article: Link To Article – provided by Kansas City Realtors