Home News Pending Home Sales Fall for the Fifth Straight Month in October

Pending Home Sales Fall for the Fifth Straight Month in October

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What the data show:

Contract signings for existing homes fell 4.6% in October as home buying activity continued to slow. Pending home sales fell 37.0% below last year’s level as Freddie Mac’s 30-year fixed rate crossed his 7% threshold by the end of October. This is his first level in 20 years. Mortgage rates rose more than 350 basis points compared to last year, and home prices rose 13.3% in his October, suggesting that many buyers were unable to finance their home purchases in October. I mean As a result, the Pending Home Sales Index (PHSI) fell to his lowest level since June 2010. Pending home sales decreased month-over-month in all regions except the Midwest.as mentioned in Hottest Markets in October Demand from home shoppers continues to be relatively high in the Midwest due to affordability, according to the report. However, compared to October last year, all regions saw a decline in the number of contract signings. The West saw both the biggest year-over-year decline in pending home sales and the biggest month-over-month decline.

What this means for the housing market:

Mortgage rates have fallen since October, down 0.5 percentage points from their recent peak of 7.08%. Still, with the current rate of 6.58% below the peak, funding 80% of the median home purchase would mean paying about $900 more each month than it did a year ago. This moratorium on mortgage rates could be short-lived depending on future inflation data. The Fed remains committed to its 2% inflation target, which means further rate hikes are likely, but the magnitude of the rate hikes will depend on future CPI data.

Usually, when temperatures drop from summer highs, so do house prices. Prices for October are down about $25,000 from their summer peaks, although they are still up from last year. Buyers who can compete against higher rates may enjoy more inventory, more markdowns, and less competition for the remainder of the season. Homeowners looking to sell before the end of the year A buyer may need to negotiate flexibly to maintain the buyer’s interest.Fluctuations in interest rates make the coming months more difficult to predict, but shoppers can take advantage of Realtor.com Purchasing Power Tool Make a budget for possible scenarios.

Hannah JonesHannah Jones

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