U.S. Home Contracts Hit October Low as Rates Top 7%

U.S. buyers signed far fewer home contracts in October as mortgage rates stayed above 7%. Newly pending sales were down 16.8% from a year earlier, making it the weakest October for contract activity since 2018. Completed sales also declined, with 304,105 transactions recorded in Zillow’s preliminary count. That was 8.7% below last year and 5.4% under September.

Affordability worsened quickly. The estimated payment on a typical home reached $2,004 with 20% down, excluding taxes and insurance. That was 4.8% higher than September and the biggest monthly increase in four years. Including other ownership expenses, a median-income household would devote 41.5% of monthly income to the typical home, compared with 39.2% a year earlier. Sellers, meanwhile, had barely reduced prices: the typical home was valued at $364,812, up 0.7% annually.

Renters faced rising costs too. Typical rent reached $1,913, increasing 2.9% year over year. Inventory stood at 1.4 million homes, 3.4% above last year, while homes needed a median 31 days to go pending. The October figures point to an even weaker November for closings, though the slowdown is expected to moderate into the new year.