US Pending Home Sales Fall 7.3 Percent to a Record Low in September

Contracts to buy previously owned homes in the United States fell sharply in September, dropping 7.3 percent from August to the lowest level on record, the National Association of Realtors said on Tuesday, October 20, 2026. The group's Pending Home Sales Index fell to 66.0, its weakest reading since the series began in 2001. Economists polled by Reuters had expected a slip of only 0.5 percent.

The September reading was also 11.3 percent below September 2025. August had looked steadier, with the index rising 0.3 percent to 71.2, which makes the September drop a clear break rather than a slow drift down.

Every region fell

Contracts fell in all four regions the association tracks. The West dropped 9.2 percent from August, the South fell 8.2 percent, the Midwest fell 6.5 percent and the Northeast fell 4.2 percent. Measured against a year earlier, the West was down 15.0 percent, the South was down 12.0 percent, the Northeast was down 9.4 percent and the Midwest was down 8.7 percent.

Even the strongest local markets lost ground over the year. Among the 50 largest metro areas, Nashville posted the smallest annual decline at 2.0 percent, followed by Hartford at 2.1 percent and San Francisco at 3.5 percent, according to Realtor.com data cited in the release. No major market on that list rose.

Mortgage rates did the damage

"Market conditions weakened in September due to fast-rising mortgage rates," said Lawrence Yun, the association's chief economist. He said job growth and income gains can support home purchases, but housing affordability reacts more to mortgage rates. The average 30-year fixed mortgage rate reached 7.40 percent last week, the highest level in nearly three years, according to Freddie Mac figures cited by Reuters.

Yun said mortgage rates could be topping out, since they have already risen much more than the Federal Reserve's short-term rate moves. He also warned that rising energy prices and the inflation pressure they bring leave that outlook uncertain. For now, he said, buyers and sellers may simply hold back until rates move in their favor, while the small number of distressed properties on the market keeps home prices steady.

A second weak housing report in one morning

The pending sales report landed hours after the Census Bureau said housing starts fell 5.2 percent in September to a 1.221 million annual rate. Builders and buyers are now sending the same signal in the same month: builders are starting fewer homes, and buyers are signing fewer contracts for homes that already exist.

Pending sales matter because they point ahead. A sale counts as pending when the contract is signed but the deal has not closed, and most contracts close within one or two months. A record low reading for September therefore points to soft closed sales in October and November, unless rates fall fast enough to bring sidelined buyers back.