Blog
Pending Home Sales Fall to Record Low, Behind Even Subprime Crisis Years
November 28, 2023
Home sales fell in October, with some metrics falling to levels even lower than during the subprime mortgage crisis and ensuing recession, as high interest rates and home prices continue to weigh on the housing market.
Sales of existing homes, which make up the bulk of the housing market, fell 4.1% in October from the month prior to a seasonally adjusted annual rate of 3.79 million, the lowest rate since August 2010, according to the National Association of Realtors (NAR). On an annual basis, October’s sales were down 14.6% from a year earlier.
Homes sold in October reflect contracts that were signed in August and September. The NAR’s pending sales index measures signed contracts, so it is the most recent indicator of housing demand. It reflects the buyers who were out shopping in October, which was when the popular 30-year fixed mortgage rate climbed above 8%.
Pending sales dropped 1.5% in October from September, and 8.5% from a year earlier. That puts the index at the lowest level since the NAR began tracking the metric in 2001, which means that the readings are even worse than they were during the financial crisis in 2007 and 2008.
Mortgage rates have since pulled back somewhat to around 7.3%, according to Mortgage Daily News, but this offers only limited relief to prospective buyers who are still facing high prices and a very low supply of homes on the market.
The national median price for an existing home rose 3.4% in October from a year earlier to $391,800, NAR said. That was the highest price for any October in data going back to 1999.
