The National Association of Realtors reported that September saw a 2.3% drop in Pending Home sales. This is an indicator of the number of contracts signed to purchase existing homes.

Analysts predicted a small monthly increase. Comparing September 2020, sales were 8.8% lower.

The indicator that closed sales will be within one or two months is the pending sales.

Higher mortgage rates may be responsible for sales falling. Mortgage News Daily reports that the 30-year average fixed-rate mortgage rate dropped below 3% in June and held there through September. It then began to rise and reached a peak of 3.15%, which was the end of August.

Sellers still have to contend with high prices for their homes. Year-over-year price gains were close to 20%. However, August saw a cooling trend with less bidding wars, and slightly higher supply.

Lawrence Yun (NAR chief economist) stated that although contract transactions slow down in September, they are showing signs of a more calmer trend for home prices, with the market running comfortably ahead pre-pandemic activity. Noting the fact that inventory is expected to be lower than in the summer months will help you understand why this happens so often, it’s worthwhile.

The Northeast saw a decline of 3.2% in pending sales month-over-month, and was down 18.5% compared to a year earlier. The Midwest saw sales drop by 3.5% and 5.8% each month.

The South saw a decrease in sales transactions of 1.8% per month, and 5.8% since September 2020. Sales in the West fell by 1.4% and 7.2% compared to a year earlier.