The National Association of Realtors reports that in October 2022, pending home sales in the United States decreased for the fifth consecutive month. All four U.S. regions saw a decline in transactions from the previous year, as well as month-over-month declines in three of the four regions.
In October, the Pending Home Sales Index (PHSI), a measure of impending home sales based on contract signings, fell 4.6% to 77.1. Pending transactions decreased by 37.0% on a yearly basis. The level of contract activity in 2001 is represented by an index of 100.
According to Lawrence Yun, chief economist for the NAR, October was a challenging month for homebuyers as they dealt with mortgage rates that were 20 years high. “The West region in particular felt the effects of both high-interest rates and high housing costs. Only the Midwest narrowly managed to gain.”
Mortgage rates “appear to have already peaked and have been coming down since mid-November, so the coming months should see a return of buyers.”
Contingent Residential Sales by Region
The Northeast PHSI dropped by 4.3% from the previous month to 68.7, a drop of 29.5% from October 2021.
In October, the Midwest index increased 3.3% to 83.5, down 32.1% from a year earlier.
In October, the South PHSI fell 38.2% from the previous year, falling 6.4% to 90.6.
The West index dropped 46.2% from October 2021 to 55.6 in October, a loss of 11.3%.