Pending Home Sales Hit a Record Low: What the September Data Shows

Contracts to buy existing U.S. homes dropped to the lowest level on record in September, as rising mortgage rates kept buyers and sellers on the sidelines. The National Association of Realtors reported Tuesday that its Pending Home Sales Index fell 7.3% to 66.0, the weakest reading since the series began in 2001.

The drop was steeper than any forecast in a Bloomberg survey of economists, according to The Spokesman-Review. Here is what the report showed and what it could mean for people thinking about buying or selling.

What did the report show?

The index tracks signed purchase contracts rather than completed sales. After a 0.3% rise in August, it fell 7.3% in September, HousingWire and Haver Analytics reported. Haver noted that it was the third monthly decline in four months, following a 2.6% drop in July.

Haver also said the index is down 47.2% from its October 2021 high of 125.1.

How does it compare with a year ago?

Reports differ slightly on the annual figure. HousingWire and Haver put the year-over-year decline at 11.3%. The Spokesman-Review, citing data not adjusted for seasonal variations, said contract signings were down nearly 13% from a year earlier. Haver described the 11.3% drop as the deepest annual fall since August 2023.

Which parts of the country were hit hardest?

Pending sales fell from August in all four regions. The West posted the steepest decline at 9.2%, with its index at 49.3. The South, the largest home-selling region, fell 8.2%, according to The Spokesman-Review and Haver. The Midwest dropped 6.5%, and the Northeast fell 4.2%, with its index at 59.0.

Compared with a year earlier, the West was down 15.0%, the South 12.0%, the Northeast 9.4% and the Midwest 8.7%. Among the 50 largest metro areas, HousingWire said the smallest annual declines were in Nashville (2.0%), Hartford (2.1%) and San Francisco-Oakland-Fremont (3.5%).

Why are mortgage rates getting the blame?

NAR Chief Economist Lawrence Yun attributed the weakness to “fast-rising mortgage rates.” Haver, citing Freddie Mac, said the average 30-year fixed rate rose to 6.86% in September from 6.67% in August. That was the highest since January 2025, though below the October 2023 peak of 7.62%.

The Spokesman-Review said rates have climbed since the start of the Iran war and are at their highest in almost three years. The two outlets describe the high point differently.

Yun said buyers and sellers may simply be waiting until rates move in a more favorable direction. He also said mortgage rates have already risen much more than the Federal Reserve’s short-term rate hikes, and suggested they could be nearing a top. He added that a limited number of distressed properties is helping keep home prices steady.

What does this mean for buyers and sellers?

The data points to a market where fewer deals are being signed. The Spokesman-Review described the housing market as stuck in gridlock because of high borrowing costs and high home prices. Yun said housing affordability is affected more by changes in mortgage rates than by job growth or income gains, though those can support purchases.

For anyone planning a purchase, the figures suggest the pace of contract activity has slowed sharply. Haver recalled that the 30-year rate was a record-low 2.68% in December 2020, and more than double that now. Haver also noted a low of 5.22% in August 2022.

Does this signal what happens to completed sales?

Contract signings usually come a month or two before closings, and they have historically served as a forward-looking indicator of existing-home sales, according to The Spokesman-Review. Haver said NAR found contract activity leads closed existing-home sales by about two months.

HousingWire offered a more recent snapshot from its own data. It showed 51,947 new pending single-family home sales for the week ending Oct. 16, down 13.1% from a year earlier. Separately, The Spokesman-Review said new-home groundbreakings slowed in September to one of their weakest readings since 2020.

Sources: The Spokesman-Review, HousingWire, Haver Analytics