NEW YORK — Contracts to buy previously owned homes in the United States fell to a record low last month as mortgage rates climbed sharply.
The National Association of Realtors said on the 20th that its pending home sales index for September dropped 7.3% from August to 66. That was the lowest reading since the series began in 2001.
Contract signings fell broadly across the country. The West posted the steepest decline at 9.2%, while the South, the largest housing market in the U.S., saw a drop of 8.2%.
Analysts attribute the slowdown to high mortgage rates driven by the recent rise in U.S. Treasury yields. The average rate on a 30-year fixed mortgage stood at 7.40% as of the 15th, the highest in three years, according to Freddie Mac, the government-sponsored mortgage company. Pending sales are considered a leading indicator of the housing market because contracts are typically signed one to two months before a sale closes.
"Market conditions deteriorated significantly in September because of the surge in mortgage rates," said Lawrence Yun, chief economist at NAR. "Both buyers and sellers appear to be waiting on the sidelines until mortgage rates move in their favor."