The US housing market experienced a decline in pending home sales for the month of August, signaling a weakening demand. Pending home sales decreased by 7.1% compared to the estimated decline of 0.8%. This decline brings the pending home sales index to its lowest level since the start of the pandemic in 2020, which is also the lowest level recorded since 2005.
When looking at the regional breakdown, all four major regions of the United States saw a decrease in pending home sales. The West region experienced the largest decline of 7.7%, followed by the Midwest with a decline of 7.0%, the South with a decline of 9.1%, and the Northeast with a more modest decline of 0.9%. These regional declines further exacerbate the overall weakening of the housing market.
Additionally, another factor that could potentially impact the housing market is the increase in mortgage rates, which currently stand at 7.65%. Higher mortgage rates could deter potential homebuyers, reducing the demand for homes even further. With the combination of declining pending home sales, regional downturns, and rising mortgage rates, the US housing market faces a challenging period ahead.