Pending home sales slid for the fifth consecutive month in October, according to the National Association of Realtors (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, sank 4.6% to 77.1 in October. Year over year, pending transactions slipped by 37%. An index of 100 is equal to the level of contract activity in 2001.
“October was a difficult month for home buyers as they faced 20-year-high mortgage rates," says NAR chief economist Lawrence Yun. "The West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain."
Three of four U.S. regions recorded month-over-month decreases, and all four regions recorded year-over-year declines in transactions.
The Northeast PHSI sank 4.3% from the prior month to 68.7, a fall of 29.5% from October 2021. The South PHSI dropped 6.4% to 90.6, falling 38.2% from the prior year. The West index slipped by 11.3% to 55.6, sinking 46.2% from October 2021. And the Midwest index increased 3.3% to 83.5, a decrease of 32.1% from one year ago.
"The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November," continues Yun.