US pending home sales fall to record low as mortgage rates surge

{"text":[[{"start":7.64,"text":"A leading indicator of US housing activity fell to its lowest level on record in September, underscoring the adverse impact of high mortgage rates on the real estate sector."}],[{"start":17.52,"text":"An index tracking pending home sales tumbled in September to its lowest level in data stretching back to 2001, the National Association of Realtors said on Tuesday. These are sales where the property is under contract after a seller has accepted an offer from a buyer and are typically viewed as a key signal of the housing market."}],[{"start":36.8,"text":"The September data marked a drop of 7.3 per cent from August, one of its biggest monthly decreases since the pandemic and exceeding the 0.5 per cent fall forecast by economists, and an 11.3 per cent decline from a year ago."}],[{"start":null,"text":"

"}],[{"start":51.36,"text":"That deterioration has occurred against a backdrop of mortgage rates hitting three-year highs as US Treasury yields jump on expectations the Federal Reserve will need to raise interest rates to bring inflation under control."}],[{"start":63.54,"text":"Data released earlier on Tuesday showed further signs of stress in the housing market. The number of housing starts fell more than expected to 1.22mn in September. That is the lowest level since May, which in turn was the weakest reading since the economic upheaval caused by the coronavirus pandemic."}],[{"start":80.68,"text":"Two weeks out from midterm elections, affordability remains a primary concern for many American voters. The 30-year mortgage rate last month topped 7 per cent for the first time since January 2025 and has continued to rise, reaching its highest level since November 2023."}],[{"start":97.66,"text":"That has increased the cost of one of the biggest expenses for many American households, at a time when wallets have already been stretched by Donald Trump’s months-long war against Iran, which has pushed up energy prices, and as his tariff regime raises the cost of imported goods."}],[{"start":112.48,"text":"“Market conditions weakened in September due to fast-rising mortgage rates,” said NAR chief economist Lawrence Yun. “Although job growth and income gains can support home purchases, housing affordability is more affected by changes in mortgage rates.”"}],[{"start":null,"text":""}],[{"start":126.5,"text":"The Fed in September raised its benchmark funds rate for the first time in three years in an effort to tame inflation, but investors continue to expect the central bank will have to lift it again to keep price pressures under control."}],[{"start":137.72,"text":"This has contributed to a sell-off in the government debt market. The yield on the 10-year US Treasury, which acts as a benchmark for borrowing costs, has increased by about one-third of a percentage point since the end of August and in recent weeks hit its highest level since 2002."}],[{"start":158.55,"text":"Big US homebuilders KB Home and Lennar Corporation have acknowledged a weakening in market conditions in recent months, with executives pinning drops in third-quarter revenues on declining buyer affordability as mortgage rates have risen."}],[{"start":168.8,"text":"“Sustained higher mortgage rates will continue to have their most pronounced impact on housing turnover, and the recent run-up in rates is likely to push existing home sales lower in the coming months,” according to Goldman Sachs."}],[{"start":181.12,"text":"The bank’s US economics team estimates that more than 95 per cent of mortgage borrowers have interest rates below current market rates, while 65 per cent have rates 2 percentage points below market rates. This acted as a strong disincentive for homeowners moving, they said in a note on Tuesday."}],[{"start":203.56,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792544371_4902.mp3"}