US Pending Home Sales Near 12-Year Low as Rates Top 7%

Pending home sales in the United States have fallen to their weakest point in roughly a dozen years, a stretch broken only by the brief pandemic-induced freeze of 2020, according to recent housing data. The sharp deterioration signals deepening stress across the residential real estate market as affordability constraints mount.

Mortgage rates climbing above 7% are widely cited as the primary driver squeezing prospective buyers out of the market. At that borrowing cost, monthly payments on a median-priced home have swelled well beyond the reach of many households that were active in the market just two years ago, when rates hovered near historic lows.

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Despite weakening demand, inventory is finally showing signs of recovery. The total supply of homes available for sale rose to its highest level since March 2020, offering some relief to buyers who remain in the market. However, higher supply has not translated into deal closings — 14.5% of homebuying contracts fell through in September alone, reflecting buyer hesitation and financing difficulties even after agreements are reached.

The combination of elevated rates, stalled transactions, and rising cancellations paints a complicated picture for the housing sector heading into the final months of the year. Analysts note that any meaningful recovery in sales activity will likely depend on whether the Federal Reserve's rate trajectory shifts enough to bring mortgage costs back down toward levels that restore buyer confidence.

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