The Blubber

Pending home sales drop to a record low, even worse than during the financial crisis, per CNBC.

Pending home sales, a gauge of signed contracts on existing homes, declined by 1.5% in October compared to September. This marks the lowest level since the National Association of Realtors started tracking this metric in 2001, indicating a more severe situation than readings during the financial crisis over a decade ago. Sales saw an 8.5% drop from October of the previous year.

As the index measures signed contracts, it provides the most recent insight into housing demand by reflecting the buyers active in October, a period when the popular 30-year fixed mortgage rate briefly surpassed 8%. Although rates have since eased to around 7.3%, according to Mortgage News Daily, realtors emphasize that the issue isn't solely high rates but also the persistently low supply of available homes, hindering activity.

Lawrence Yun, chief economist for the NAR, stated, “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.”

Pending sales declined in all regions month-over-month except in the Northeast, with the most significant drop occurring in the West, where homes are typically more expensive. Sales were down across the board compared to the previous year.

The combination of restricted supply and robust demand has maintained pressure on home prices, consistently reaching new highs and displaying signs of accelerating gains. The Realtors pointed out that sales of homes priced above $750,000 have been increasing due to a higher supply in the upper-end market.