Mortgage rates shot up in September, and it hit the housing market hard. The latest data shows pending home sales fell 7.3% from August, and that’s 11.3% lower than last year. The National Association of Realtors reported this.
Rates started the month around 6.8% and climbed to 7.6% by the end.
Lawrence Yun from the Realtors said that even though jobs and incomes are up, affordability is really affected by mortgage rates.
Sales dropped in every region, but the South saw the biggest fall at 8.2%, and the West at 9.2%. The South is usually hot, and the West is pricey.
Construction took a hit too. Single-family starts down 4.56% to 859,000, the lowest since last September. Permits for future building fell 4%.
Ben Ayers at Nationwide Financial thinks construction will stay slow into 2027. Builders are stuck with unsold homes, cutting prices and offering deals, which hurts their profits. Higher rates mean fewer starts, which could drag on the economy.
October homebuilder sentiment was the worst in 14 years, per the National Association of Home Builders. Current sales, future plans, and buyer interest all dropped, with interest hitting rock bottom.
Robert Dietz from NAHB said housing is struggling with supply limits and affordability. People want to buy, but high rates, costs, and low confidence are keeping them on the sidelines.
