Hope was high for a rebound (after new-home-sales slumped), but that was dashed as pending home sales plunged 2.6% MoM in October (well below the expected 0.5% MoM bounce).
Additionally, Pending Home Sales fell 4.6% YoY – the 10th consecutive month of annual declines…
This is the weakest pending home sales since June 2014…
As Bloomberg notes, the results underscore the challenges as elevated prices and rising mortgage rates are keeping more Americans on the sidelines of the housing market. Economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when a deal closes, typically a month or two later.
The recent rise in mortgage rates has “reduced the pool of eligible homebuyers,” Lawrence Yun, NAR’s chief economist, said in a statement.
While the job market looks strong, making long-term prospects look solid, “we just have to get through this short-term period of uncertainty.”
Pending sales fell in three of four regions, led by a an 8.9 percent slump in the West as the Midwest and South also declined. Signings in the Northeast rose 0.7 percent.
Finally, and most problematically, economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when a deal closes, typically a month or two later.
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