Pending Home Sales Stall In September Amid Labor Market Concerns, Even As Mortgage Rates Drop To Lowest Level In Over A Year

• According to data from the National Association of Realtors, an index of contract signings was flat in September at 74.8, after rising by 4.2% in August.
• This comes at a time when mortgage rates have fallen to their lowest level in more than a year.
• According to data from the Mortgage Bankers Association, the 30-year fixed-rate mortgage (FRM) was down to 6.3%, its lowest level since September 2024.

U.S. pending home sales remained unchanged in September amid signs of labor market weakness preventing potential buyers from going through with home purchases.

According to data from the National Association of Realtors, an index of contract signings was flat in September at 74.8, after rising by 4.2% in August. A Wall Street consensus estimate cited by MarketWatch showed pending home sales were expected to rise 1%.

“A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market.”

— Lawrence Yun, Chief Economist, NAR

Mortgage Rates Continue To Fall

This comes at a time when mortgage rates have fallen to their lowest level in more than a year. According to data from the Mortgage Bankers Association, the 30-year fixed-rate mortgage (FRM) was down to 6.3%, its lowest level since September 2024.

“Mortgage rates decreased for the fourth consecutive week, with the 30-year fixed rate down to 6.30 percent, its lowest level since September 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications.”

Inventory At 5-Year High

Yun stated that inventory levels have risen to a five-year high. For home buyers, this presents more room for negotiating prices.

“Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity,” he added.

Meanwhile, U.S. equities rose in Wednesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.19%, the Invesco QQQ Trust ETF (QQQ) gained 0.39%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.44%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was down 0.11% at the time of writing.

Also See: Ahead Of Fed Rate Decision, El-Erian Warns Central Bank May Not 'Validate' More Cuts

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