US pending home sales fall in September

WASHINGTON: Contracts to buy US previously owned homes unexpectedly fell in September after four straight monthly increases, but the housing market remains supported by record low mortgage rates.

The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed last month, dropped 2.2% to 130.0. The decreasing was likely due to a shortage of homes available for sale.

Economists polled by Reuters had forecast pending home contracts, which become sales after a month or two, rising 3.4% in September.

Pending home sales increased 20.5% from a year ago.

The housing market has been one of the economy's star performers even as the COVID-19 pandemic has thrown millions out of work. The unemployment burden has fallen disproportionately on low-wage earners in the services industry, who tend to be young.

There has been a surge in demand for housing in suburbs and low-density areas as Americans seek spacious accommodation in the new work-from-home era. The 30-year fixed mortgage rate is averaging 2.80%, according to data from mortgage finance agency Freddie Mac.

Reports this month showed a surge in homebuilder confidence in October, and an acceleration in single-family home construction and sales of previously owned homes in September.

Last month, pending home sales rose in the Northeast. They fell in the Midwest, South and West.