Buyers pulled back sharply in September, even as completed home sales managed a small monthly gain.
The National Association of REALTORS® reported that pending home sales fell 7.3% from August and 11.3% from a year earlier. Its Pending Home Sales Index dropped to 66.0, the lowest reading since the measure began in 2001. Contract signings declined in all four regions, with the West (-9.2%) and South (-8.2%) seeing the steepest monthly drops.
Rising mortgage rates made an already difficult market even tougher. According to Freddie Mac, the average 30-year fixed mortgage rate climbed from 6.71% on Sept. 3 to 7.03% by Sept. 24. By Oct. 15, it had reached 7.40%. For buyers already stretching their budgets, that kind of increase can quickly change what they can afford.
The slowdown also presents challenges for sellers. Buyers who qualified for a certain price range earlier in the summer may now be looking at less expensive homes or putting their searches on hold altogether. Even in markets where inventory remains relatively tight, higher borrowing costs can limit the pool of buyers willing and able to make an offer.
For agents, staying ahead of those changes is increasingly important. Buyers should revisit their purchasing power with their lenders before making offers, particularly if their preapproval dates back several months. Sellers need to understand how current borrowing costs are affecting demand in their neighborhoods, rather than relying solely on comparable sales from earlier in the year. That may mean adjusting asking prices, considering seller concessions or being more flexible during negotiations.
With pending sales typically leading completed transactions by a month or two, September’s decline could begin showing up in closing figures as the year winds down. Agents who recognize those shifts early can help clients make adjustments before a listing sits too long or a buyer discovers that the home they want is no longer within reach.
