Pending home contracts sink as mortgage rates top 7 percent

Homebuying slowed sharply in September as financing became more expensive. The National Association of Realtors’ contract index registered 66. That was 7.3 percent below August and 11.3 percent behind the previous year. The index sets the 2001 pace at 100. Since it follows signed deals awaiting completion, it provides an early signal of future closings.

All four regions lost ground. The West fell 9.2 percent during the month, while its annual decrease reached 15 percent. The South recorded declines of 8.2 percent monthly and 12 percent yearly. For the Midwest, the drops were 6.5 percent and 8.7 percent. The Northeast posted decreases of 4.2 percent and 9.4 percent.

Borrowing costs rose quickly during the period. The average 30-year fixed rate stood at 6.71 percent on Sept. 3, reached 7.03 percent on Sept. 24 and climbed to 7.28 percent by Oct. 1. It hit 7.40 percent on Oct. 15, the highest point in nearly three years. Meanwhile, nearly 20 percent of active sellers cut their asking prices in September. Redfin found that 60.5 percent of completed sales closed below the initial list price. Available inventory equaled 4.8 months of sales, compared with 4.5 months in September 2025.