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Record low pending home sales reported

by Michael Stark

**U.S. Pending Home Sales Hit Record Low in October**

*Housing demand sinks as pending home sales plummet despite lower mortgage rates*

Pending home sales in the United States took a significant hit in October, as signed contracts on existing homes dropped 1.5% from September. This is the lowest level recorded since the National Association of Realtors (NAR) began tracking this metric in 2001 and marks an 8.5% decline from October of the previous year.

###A Precarious Housing Market

The pending home sales index, which measures signed contracts, serves as the most recent indicator of housing demand. It reflects the buyers who were out shopping in October, a period when the popular 30-year fixed mortgage rate briefly soared higher than 8%. Although rates have since pulled back to around 7.3%, according to Mortgage News Daily, the real estate industry continues to struggle due to the combination of high rates and a very low supply of homes for sale.

###Realtors Voice Concerns

According to Lawrence Yun, the chief economist for the NAR, “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied. Multiple offers, of course, yield only one winner, with the rest left to continue their search.”

###Regional Disparities

Pending sales fell in all regions month to month, with the exception of the Northeast. The West experienced the steepest decline, due in part to the region’s high home prices. In fact, sales were down everywhere compared with the previous year, exacerbating the already challenging market conditions.

###Impact on Home Prices

The tight supply and persistent demand have kept pressure on home prices, which continue to hit new highs and appear to be accelerating in their gains. The NAR noted that sales of homes priced above $750,000 have been increasing simply because there is more supply on the higher end of the market.

Despite the challenges, there is a glimmer of hope as mortgage rates have started to decrease. However, the industry remains cautious, with concerns about the ongoing low supply of homes for sale and its impact on housing demand.

While the housing market grapples with these challenges, particularly in the face of the ongoing pandemic, experts believe that a sustained recovery could take time.

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