Pending home sales in the US fell by almost 5%
2022.11.30 10:20
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Pending home sales in the US fell by almost 5%
Budrigannews.com – In October, contracts to purchase previously owned homes in the United States decreased for the fifth month in a row as the housing market continued to deteriorate amid rising mortgage rates.
The Pending Home Sales Index, which is based on contracts that have been signed, decreased by 4.6% to 77.1 on Wednesday, according to the National Association of Realtors (NAR).
Reuters polled economists and predicted a 5.0% decline in contracts, which eventually turn into sales after a few months. Year-over-year, pending home sales decreased by 37.0% in October.
In three of the nation’s four regions, contracts decreased.Contracts increased by 3.3% in the Midwest, but they are down 32.1% from the same month a year ago.
After falling for the ninth month in a row in October, the overall decline in signed contracts suggested that existing home sales would continue to decline.
The Federal Reserve’s quickest increase in its policy rate since the early 1980s, intended to bring down high inflation by reducing demand across the economy, has impacted the interest-rate sensitive housing sector the most.
Inflation has risen at its fastest rate in 40 years, according to the Fed’s preferred measure, and it is still more than three times higher than its target of 2%.
From close to zero in March, the Fed has increased its benchmark overnight interest rate to the current range of 3.75 percent to 4.0 percent.
However, as policymakers seek a stopping point, a smaller half-percentage point increase is anticipated at the conclusion of its next policy meeting on December 13-14, compared to the previous four meetings.
Mortgage rates, which are based on the yield on the 10-year Treasury note, are now lower than they were 20 years ago.
The Mortgage Bankers Association’s data show that the 30-year fixed mortgage rate has fallen by more than half a percentage point in the last four weeks, reaching an average of 6.49 percent last week. That’s still a lot higher than the 3.18 percent average from the same time last year.
Lawrence Yun, chief economist for NAR, stated, “October was a difficult month for home buyers.”In particular, the West region was affected by the combination of high interest rates and high home prices.
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