Rising rates and nervous consumers have set up the housing market for its “slowest fourth quarter in a decade,” according to one economist.

New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.

Pending home sales fell for the fifth straight month in October, with every single region in the U.S. seeing dropping numbers compared to a year ago, according to new data from the National Association of Realtors (NAR).

Lawrence Yun

The data shows NAR’s Pending Home Sales Index — a measure of sales based on contract signings — fell 4.6 percent in October compared to September. Compared to October of 2021, pending sales were also down a staggering 37 percent.

NAR Chief Economist Lawrence Yun consequently described this October in a statement as a “difficult month for homebuyers as they faced 20-year-high mortgage rates.”

The “West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain,” Yun went on to say.

In total, pending sales were down 11.3 percent in the West in October compared to September. Year over year, pending sales in the West were down 46.2 percent.

Pending sales in the South dropped 6.4 month over month in October and 38.2 year over year. The Northeast saw pending sales dip 4.3 month over month and 29.5 percent year over year.

The Midwest was the lone bright spot, with pending sales climbing 3.3 percent month over month in October. However, even the Midwest saw a dip compared to last year, with pending sales down 32.1.

Lisa Sturtevant

In a statement on the numbers, Bright MLS Chief Economist Lisa Sturtevant pointed to mortgage rates as the culprit behind the slow numbers and said conditions ultimately set up “the housing market for its slowest fourth quarter in a decade.” Sturtevant also notes that both buyers and sellers seem to be adopting a “wait-and-see” mentality regarding the market right now.

The slowing housing market could have “serious implications for the U.S. economy as the residential real estate sector is a major component of GDP,” Sturtevant added. However,  despite slowing pending sales, “homes still sell relatively quickly and prices are holding firm in many markets.”

Yun also offered some optimism, speculating in his statement that “the upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Email Jim Dalrymple II

Lawrence Yun | NAR
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×