WASHINGTON, Oct 20 (Reuters) – Contracts to purchase used homes in the United States plunged to a record low in September as rising mortgage rates depressed demand for housing.
The pending home sales index fell 7.3% to 66.0 last month, the lowest level since the series began in 2001, the National Association of Realtors said Tuesday. Economists polled by Reuters had forecast that contracts, which would turn into sales after a month or two, would decline by 0.5%.
“Market conditions weakened in September due to rapidly rising mortgage rates,” said Lawrence Yun, NAR chief economist.
Contracts fell in all four regions. Pending home sales fell 11.3% year-over-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 company Freddie Mac showed. Higher borrowing costs, tracking Treasury yields as the U.S.-Israeli war with Iran stokes inflation, are depressing home sales.
(Reporting by Lucia Mutikani; editing by Chizu Nomiyama)
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