The numbers: A measure of pending home sales fell in October for the second month in a row, signaling the surprisingly strong surge in demand during the pandemic might be ebbing. The index of pending home sales dropped 1.1% in October after a 2.2% decline in September, the National Association of Realtors said Monday. While pending sales are still up 20% compared to a year earlier, rising home prices could be cutting into demand. Cooler weather and a record increase in U.S. coronavirus cases might also be hurting sales. The index measures real-estate transactions in which a contract is signed, but the sale had not yet closed. What happened: The South was the only major region to post an increase in pending sales, though just barely. Pending sales posted the biggest decline in the Northeast. The big picture: Record low mortgage rates and an increase in families leaving cities to escape the coronavirus have boosted home sales during the pandemic, leading to a flush in spending on furnishings and other related goods. The housing market has been a surprising bright spot for the economy. Yet the spike in demand has reduced the inventory of homes for sale, which were already in short supply, to a historic low. That’s pushed up prices, discouraged would-be buyers — and could lead to softer sales in the future. What they’re saying: “The housing market is still hot, but we may be starting to see rising home prices hurting affordability,” said Lawrence Yun, NAR’s chief economist Market reaction: The Dow Jones Industrial Average and S&P 500 both fell in Monday trades. The post U.S. Pending Home Sales Fall 1.1% in October as Higher Prices Discourage Buyers appeared first on Real Estate News & Insights | realtor.com®. via https://www.realtor.com/news/real-estate-news/u-s-pending-home-sales-fall-1-1-in-october-as-higher-prices-discourage-buyers/
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