Pending home sales chart courtesy of Trading Economics

Understanding Pending Sales 

• New homes are reported at contract closing. Existing home sales are reported at closing. 
• Pending sales represent contracts signed but not closed.
• The September pending home sales report is an advance indicator of existing home sales for October and and partially November. 

Pending Home Sales Dive 10.2% in September

The National Association of Realtors reports Pending Home Sales Waned 10.2% in September (Plunge or Dive is a better word than wane).

• 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.

Pending Home Sales Regional Breakdown

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

Mortgage Rates

Mortgage rates courtesy of Mortgage News Daily

Mortgage rates have more than doubled in little over a year.

No Surprise

Given the national average mortgage rate is over 7 percent and the global economy is sinking fast, the collapse in existing home sales is no surprise. 

Existing Home Sales Decline 8th Consecutive Month, Down 1.5% Says NAR

On October 20, I noted Existing Home Sales Decline 8th Consecutive Month, Down 1.5% Says NAR

In a report that will shock no one, existing home sales declined for the eighth month in September, down 1.5 percent, according to the National Association of Realtors.

The above report was about September sales. 

The September pending home sales report reflects on October closings. Expect a massive plunge in existing home sales in October. 

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