US Pending Home Sales Plummet as Mortgage Rates Soar

Pending home sales in the US plummeted by 7.1% in August, a larger decline than expected, as high mortgage rates deterred buyers and sellers. Year over year, pending transactions are down 18.7%. The surge in mortgage rates has diminished the pool of home buyers, causing some to pause and adjust their expectations. Meanwhile, would-be sellers with lower rates are staying put, exacerbating the ongoing inventory shortage. The decline in sales has also contributed to a drop in new home prices. Increased housing inventory and better interest rates are seen as essential to revive the housing market.