Pending home sales dropped to their lowest level in 25 years in September. Buyers pulled back as the average 30-year mortgage rate climbed above 7%.
The decline marks a sharp slowdown in contract signings to purchase homes. It reflects how quickly higher borrowing costs are reshaping the housing market.
Mortgage rates crossing the 7% threshold pushed many prospective buyers to the sidelines. Monthly payments rose, stretching budgets and cooling demand.
The drop in pending sales signals weaker home purchases in coming months. Signed contracts typically precede closings by several weeks.
Housing inventory remains tight, adding pressure to affordability. Limited supply and elevated rates are squeezing buyers from both sides.
The slowdown could weigh on the broader housing sector. Sales volume and related spending may soften as activity cools.
Some buyers are waiting for rates to ease before reentering the market. Others continue to face stiff competition for a small pool of available homes.
