Fewer Americans sign contracts to buy homes in October

Pending sales fell 1.1%, to 128.9 in October

The number of Americans signing contracts to buy homes fell for the second consecutive month as lack of available homes continues to stifle house hunters.

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The National Association of Realtors said Monday that its index of pending sales fell 1.1%, to 128.9 in October, down from a reading of 130.3 in September. An index of 100 represents the level of contract activity in 2001.

EXISTING-HOME SALES SOAR 9.4% IN SEPTEMBER, MARKING FOURTH CONSECUTIVE MONTH OF GROWTH

Thanks to a red-hot summer, contract signings are still 20.2% ahead of where they were last year after lagging in spring due to the coronavirus pandemic. Contract signings are a barometer of finalized purchases over the next two months.

A sale pending sign is displayed outside a residential home for sale in East Derry, N.H. on Sept. 29, 2020. (AP Photo/Charles Krupa, File)

Three out of four regions saw declines in contract signings, with only the South logging a small gain.

Historically low interest rates are drawing prospective buyers into the market, but home prices have risen significantly the past year as supply remains near all-time lows.

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Mortgage finance giant Freddie Mac reported last week that the average rate on the 30-year fixed-rate home loan remained at a record low 2.72%.

The median price for an existing single-family home reached $313,000 in October up almost 16% from October 2019. The median price of a new home sold in October was $330,600, according to the Commerce Department.

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