Pending home sales fell for the fourth consecutive month in September, the National Association of Realtors reported on Oct. 28.

WASHINGTON—Pending home sales fell for the fourth consecutive month in September, the National Association of Realtors reported on Oct. 28. All four major regions recorded month-over-month and year-over-year declines in transactions.

The Pending Home Sales Index (PHSI) slumped 10.2% to 79.5 in September. Year-over-year, pending transactions slid by 31.0%. An index of 100 is equal to the level of contract activity in 2001.

The Northeast PHSI descended 16.2% from last month to 64.2, a decline of 30.1% from September 2021

“Persistent inflation has proven quite harmful to the housing market,’ said NAR Chief Economist Lawrence Yun. “The Federal Reserve has had to drastically raise interest rates to quell inflation, which has resulted in far fewer buyers and even fewer sellers.”

Yun noted that new home listings are down compared to one year ago since many homeowners are unwilling to give up the rock-bottom, 3% mortgage rates that they locked in prior to this year.

“The new normal for mortgage rates could be around 7% for a while,” Yun added. “On a $300,000 loan, that translates to a typical monthly mortgage payment of nearly $2,000, compared to $1,265 just one year ago—a difference of more than $700 per month. Only when inflation is tamed will mortgage rates retreat and boost home purchasing power for buyers.”

Pending Home Sales Regional Breakdown

In addition to the Northeast, pending sales in the other three regions fell in September. The Midwest index retracted 8.8% to 80.7 in September, down 26.7% from one year ago. The South PHSI faded 8.1% to 97.0 in September, a drop of 30.0% from the prior year. The West index slipped by 11.7% in September to 62.7, down 38.7% from September 2021.