RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

Pending Sales Sink Again as Rates Track Toward 7%

Home Agents
By Jesse Williams
September 28, 2022
Reading Time: 3 mins read
Pending Sales Sink Again as Rates Track Toward 7%

Pending home sales fell again—at a faster rate than they did a month ago—as spiraling mortgage rates threaten to freeze real estate activity as much of the country prepares for the colder fall and winter months.

The National Association of REALTORS®’ (NAR) metric for pending sales fell 2% in August after a smaller 1% drop in July. The index is down 24.2% year-over-year.

“The direction of mortgage rates—upward or downward—is the prime mover for home buying, and decade-high rates have deeply cut into contract signings,” said NAR Chief Economist Lawrence Yun in a statement.

The decrease is no surprise, with sales falling consistently—and sometimes sharply—through the spring and summer, as the Federal Reserve’s efforts to combat inflation have helped drive mortgage rates to reach more than double their pandemic-era lows. Other leading indicators—building permits and housing starts—have also generally pointed toward medium-term decreases in real estate activity.

“As a result of both rising prices and escalating mortgage rates, the monthly payment for the typical homebuyer is now more than double what it was three years ago in some markets,” said Bright MLS Chief Economist Dr. Lisa Sturtevant in a statement. “The buyers who remain in the market are being more discerning, taking their time to look at properties and making offers that are below asking price.”

At the same time, foreclosures have remained low and prices have remained relatively strong, although there is no guarantee that this will hold, with most experts forecasting at least some regional price drops.

Speaking of regions, the West has proven more resilient recently, with sales and new housing starts both holding steady this month as other regions have dipped.

For pending sales, the West actually rose by 1.4% from last month compared to a 5.2% drop in the Midwest, a 3.4% decline in the Northeast and a slip of 0.9% in the South.

But the West has also seen the biggest slide from a year ago—down 31.3% from last year. The South is 24.2% lower than a year ago, while the Northeast has pulled back 19%. The Midwest has seen a decrease of 21.1%.

“Home prices are the least affordable in the West and, consequently, the region suffered deeper annual declines in contract signings due to rising interest rates when compared to other areas of the country,” Yun noted. “However, the recent increases of the last two months, though small, are encouraging.”

While some have said it is disingenuous to compare this year’s more normal real estate market to the historic boom of 2020 and 2021, economists have pointed out that 2022 is still a softer year for housing, with most metrics falling below the pre-pandemic market—albeit much less dramatically.

“Pending sales…continue to track below 2019 levels,” said Sturtevant. “Homes are taking longer to sell, with the median days on market higher than it has been since early 2020.”

Yun added that there is little hope of a short-term turnaround based on other macroeconomic factors—with interest rates being the largest. Fed Chair Jerome Powell has promised to keep raising rates, potentially to a restrictive level, and Yun said it is likely that rates will push up close to 7% by the end of the year.

“If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize,” he predicted. “Only when inflation calms down will we see mortgage rates begin to steady.”

Tags: home sale dataHousing Marketmedian pricemortgage rate increaseNARPending Home Salessingle family home
ShareTweetShare

Jesse Williams

Jesse Williams is a senior editor for RISMedia.

Related Posts

LeadingRE Welcomes New Business Solution
Industry News

LeadingRE Welcomes New Business Solution

September 21, 2023
Embracing Sustainability: The Top Eco-Friendly Home Improvements
Consumer

Embracing Sustainability: The Top Eco-Friendly Home Improvements

September 21, 2023
Why Virtual Staging AI is Transforming the Home-Staging Industry
Industry News

Why Virtual Staging AI is Transforming the Home-Staging Industry

September 21, 2023
Foreclosure Activity Rises in August
Industry News

Foreclosure Activity Rises in August

September 21, 2023
Berkshire Hathaway HomeServices Expands in Italy
Brokers

Berkshire Hathaway HomeServices Expands in Italy

September 21, 2023
Existing-Home Sales Decreased 0.7% in August
Industry News

Existing-Home Sales Decreased 0.7% in August

September 21, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Tip of the Day

The All-Cash Offer: Still a Home-Buying Slam-Dunk Strategy?

Buying a house for cash, meaning no mortgage, can seem like the most strategically savvy and best way to gain an accepted offer. But there are subtle pros and cons to such a maneuver, more so for the buyer, but also for the seller. Read more.

Business Tip of the Day provided by

Recent Posts

  • LeadingRE Welcomes New Business Solution
  • Embracing Sustainability: The Top Eco-Friendly Home Improvements
  • Why Virtual Staging AI is Transforming the Home-Staging Industry

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2023 Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2023 Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

Join Premier for as low as $30!

Join Premier
logo-rismedia-white
x
X