August Sees Unexpected Drop in U.S. Pending Home Sales

Contracts to buy existing homes in the US fell more than expected in August, dropping by the largest margin in nearly a year, as high mortgage rates eroded affordability. The National Association of Realtors' Pending Home Sales Index declined by 7.1%, exceeding economists' forecasts. On a year-over-year basis, pending sales were down 18.7%. The decrease in sales was driven by declining buyer affordability, with average mortgage payments rising by 18% compared to the previous year. The Federal Reserve's campaign to raise interest rates to curb inflation has kept mortgage rates above 7% since early August.