Pending home sales slid for the fifth consecutive month in October, according to the National Association of Realtors. Three of four U.S. regions recorded month-over-month decreases, and all four regions recorded year-over-year declines in transactions.
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 Lawrence Yun, NAR’s chief economist. “The West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain. 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.”
The Northeast PHSI sank 4.3% from last month to 68.7, a fall of 29.5% from October 2021. The Midwest index increased 3.3% to 83.5 in October, a decrease of 32.1% from one year ago.
The South PHSI dropped 6.4% to 90.6 in October, falling 38.2% from the prior year. The West index slipped by 11.3% in October to 55.6, sinking 46.2% from October 2021.