Pending Home Sales Hit a Record Low in September, Down 7.3% as the 30-Year Rate Holds at 7.40%

Contracts to buy an existing home collapsed into record-low territory in September, and the print came in much weaker than the market had braced for. The National Association of Realtors' pending home sales index fell 7.3 percent last month to 66.0, the lowest reading since the series began in 2001 and a far larger decline than the 0.5 percent slip economists had forecast.

Pending home sales are the closest thing housing has to a forward-looking demand gauge. A pending contract is a signed buyer-seller agreement that typically turns into a closed sale one to two months later, so the September index is the leading edge of the existing-home sales reports that will hit the tape over the next eight weeks. An index at a record low is a warning, not a glitch: homebuilders and mortgage lenders both read this series as the earliest reliable signal that foot traffic is drying up.

Related reading: Freddie Mac's 7.28% Rate Reprices Fall Housing Demand.

The driver is not a mystery. Mortgage rates ratcheted higher through September, with the 30-year fixed average climbing from 7.03 percent the week of September 24 to 7.28 percent the week of October 1 and then to 7.40 percent the week of October 8, where it held on October 15, according to Freddie Mac's Primary Mortgage Market Survey. A year earlier, in mid-October 2025, the average was 6.27 percent. The jump of roughly 1.1 percentage points pushed the payment math solidly against buyers.

Run the affordability math and the collapse makes sense. On a $400,000 loan, principal and interest at 7.40 percent runs about $2,770 a month, roughly $300 more than the same loan carried a year ago at 6.27 percent. Add property taxes, insurance and the near-record shelter costs that have eaten into budgets, and a meaningful slice of would-be buyers simply stepped aside. NAR's chief economist, Lawrence Yun, put it plainly: "Market conditions weakened in September due to fast-rising mortgage rates."

Related reading: 7.28% Mortgage Rate Puts October Home Demand to the Test.

The weakness was broad but it was not even. Every region fell, and the highest-cost regions led the way. The West posted the largest month-over-month decline at 9.2 percent and was down 15.0 percent from a year ago, the South fell 12.0 percent year over year, and the Northeast and Midwest dropped 9.4 percent and 8.7 percent respectively. The regional order tracks asking prices: the pricier the market, the bigger the rate shock, because a one-point move costs far more in dollars on a $700,000 median than on a $350,000 one.

Independent real-time data points in the same direction. Redfin reported that 14.5 percent of home-purchase deals fell through in September, the highest share in the firm's records, and that pending sales declined from a year earlier in all 50 of the largest U.S. metros for the first time in three years. The NAR index is the official record, but the private-market versions are telling the identical story from the front lines.

Related reading: Home Prices Are Outpacing a 7% Mortgage Rate, and That Math Cannot Hold.

The counterargument deserves weight. Yun argues that mortgage rates have already risen far more than the Federal Reserve's short-term rate moves, and that rates could be topping out, with the limited supply of distressed properties keeping prices steady even as sales wilt. Buyers and sellers, in his telling, are holding back until the rate outlook clears. That is a real scenario: a 7.40 percent average that stalls would stop the worst of the damage, even if a record-low contracts index means the existing-home sales counts keep grinding lower first.

What matters next is the calendar. Freddie Mac releases this week's rate average later today, and the first question is whether 7.40 percent holds or ticks lower. The Census Bureau's new home sales report for September is due this week and will show whether builders are absorbing construction that buyers are walking away from. The October existing-home sales report will be the first to carry the full weight of this record-low contracts reading.

Related reading: Existing Home Sales Reach 3.99 Million Rate, Still 2.2% Below Year Ago.

Watch the pending index for two consecutive months of improvement before concluding that demand has bottomed. One good print would be noise, and a second would be a signal that buyers are back.

This content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Consult a qualified financial advisor before making investment decisions.

Sources: National Association of Realtors news release; Reuters via Investing.com; FRED, MORTGAGE30US; FRED, MSPUS median sales price; HousingWire; Redfin.