Pending home sales decline
Contract signings down in October for 2nd month in a row
SILVER SPRING, Md. — The number of Americans signing contracts to buy homes fell for the second consecutive month as lack of available homes continues to stifle house hunters.
The National Association of Realtors said Monday that its index of pending sales fell 1.1% to 128.9 in October, down from a reading of 130.3 in September. An index of 100 represents the level of contract activity in 2001.
Thanks to a red-hot summer, contract signings are still 20.2% ahead of where they were last year after lagging in spring because of the coronavirus pandemic. Contract signings are a barometer of finalized purchases over the next two months.
“The housing market is still hot, but we may be starting to see rising home prices hurting affordability,” Lawrence Yun, the association’s chief economist, said in a statement. The combination of low rates, lean inventory and “very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers.”
Three out of four regions saw declines in contract signings, with only the South logging a small gain.
Historically low interest rates are drawing prospective buyers into the market, but home prices have risen significantly the past year as supply remains near all-time lows
Mortgage finance giant Freddie Mac — the Federal Home Loan Mortgage Corp. — reported last week that the average rate on the 30-year fixed-rate home loan remained at a record low 2.72%.
The median price for an existing single-family home reached $313,000 in October, up almost 16% from October 2019. The median price of a new home sold in October was $330,600, according to the Commerce Department.