WASHINGTON (dpa-AFX) - Pending home sales in the U.S. plunged by much more than expected in the month of September, according to a report released by the National Association of Realtors on Tuesday.
NAR said its pending home sales plummeted by 7.3 percent to 66.0 in September after rising by 0.3 percent to 71.2 in August. Economists had expected pending home sales to fall by 0.4 percent.
'Market conditions weakened in September due to fast-rising mortgage rates,' said NAR Chief Economist Dr. Lawrence Yun. 'Although job growth and income gains can support home purchases, housing affordability is more affected by changes in mortgage rates.'
'Given that mortgage rates have already risen much more than the Federal Reserve's short-term interest rate hikes, mortgage rates could be topping out,' he added. 'However, increasing energy prices and the resulting inflationary pressure are highly uncertain.'
The much steeper-than-expected drop in pending home sales came amid weakness in all four regions of the country, with the West seeing the largest decrease.
Pending home sales in the West nosedive by 9.2 percent, pending home sales in the South plummeted by 8.2 percent, pending home sales in the Midwest plunged by 6.5 percent and pending home sales in the Northeast tumbled by 4.2 percent.
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