Pending home sales for August were down 7.1% from the previous month, data from the National Association of Realtors revealed. This far outpaces the 1% decline projected by Bloomberg economists and is also a stark contrast from the 0.9% monthly increase recorded in July.
Several property sector experts have attributed this sales decline to rising mortgage rates. “Mortgage rates have been rising above 7% since August, which has diminished the pool of homebuyers,” Lawrence Yun, NAR chief economist observed. According to Orphe Divounguy, senior economist at Zillow, higher mortgage rates, as well as seasonality, have contributed to falling sales, given that sales usually decline at this time of the year.
According to figures released by Freddie Mac, the 30-year fixed mortgage has risen to 7.23%; the highest since June 2001 when rates hit 7.24%.