Pending Home Sales Hit Record Low in September

Pending home sales in the United States fell to an all-time low in September, as surging mortgage rates pushed would-be buyers to the sidelines and deepened one of the weakest housing markets in modern records. The National Association of Realtors reported that its pending home sales index dropped 7.3% in September to 66.0, the weakest reading since the series began in 2001.

The September slide in signed contracts underscores how sensitive buyers have become to borrowing costs. Mortgage rates climbed steeply through the month, with the average 30-year fixed rate rising from about 6.8% at the start of September to roughly 7.6%, according to data cited alongside the report. The jump added hundreds of dollars to typical monthly payments, pushing many households out of qualifying range just as the autumn selling season arrived.

Every region of the country felt the chill. Pending home sales in the West tumbled 9.2%, the steepest regional decline, while the South fell 8.2%. Contract signings also sank 11.3% compared with the same month a year earlier, a sign that the weakness extends well beyond a single month's seasonal softness in the housing market.

Why Pending Home Sales Keep Falling

NAR chief economist Lawrence Yun pointed to borrowing costs as the dominant culprit behind the drop in signed contracts. Affordability pressures are being driven more by elevated mortgage rates than by job losses or income weakness, Yun said, a reminder that even a resilient labor market cannot offset the arithmetic of a 7%-plus mortgage. For many potential buyers, waiting has become the rational choice.

The rate shock has also deepened the so-called lock-in effect that continues to grip the housing market. The vast majority of existing homeowners hold loans well below today's rates, giving them little incentive to sell and take on a far more expensive mortgage. The resulting scarcity of for-sale inventory keeps home prices elevated even as transaction volumes sink to record lows, squeezing first-time homebuyers hardest.

What the Record Low in Pending Home Sales Means for Buyers

For homebuyers, the record low in pending home sales sends a mixed signal. The figures are based on signed contracts, making them a forward-looking indicator of closings in October and November, which now look set to remain depressed. Yet weaker demand also means less competition, and sellers facing longer listing times may grow more flexible on price and concessions.

Housing analysts note that the September data could prove a turning point if borrowing costs ease. October brought its own volatility, with rates briefly climbing further before retreating slightly. Any sustained move lower would likely unlock pent-up demand from buyers who have spent months waiting for a better entry point into the housing market.

Outlook for Pending Home Sales

Whether pending home sales rebound in the final quarter of the year will hinge almost entirely on the direction of borrowing costs. Most forecasters expect borrowing costs to remain elevated well into 2027, which would keep contract signings under pressure for months to come. Without meaningful rate relief, volumes are likely to stay subdued, economists say.

The report, based on signed contracts during September, was released by the NAR on Oct. 20, with Reuters among the outlets carrying the data. The association said it will continue monitoring regional contract trends as the market heads into the typically slower winter season.