Average mortgage rates rose in September and the increase led to fewer home buyers signing contracts to buy homes, according to the National Association of Realtors. The group’s most recent Pending Home Sales Index found contracts to buy homes were 7.3 percent lower than the month before and 11.3 percent below last year’s level. Regionally, pending sales were down everywhere, with the West and South seeing the biggest declines. Dr. Lawrence Yun, NAR’s chief economist, says the drop was mostly due to rates. “Market conditions weakened in September due to fast-rising mortgage rates,” Yun said. “Although job growth and income gains can support home purchases, housing affordability is more affected by changes in mortgage rates.” But while rates rose quickly in September, Yun believes they may have already topped out due to the increase outpacing the Fed’s short-term interest rate hike. (source)
