By Amina Niasse
NEW YORK (Reuters) – Contracts to buy U.S. existing homes rose unexpectedly in September despite elevated mortgage rates that continue to create gridlock in the housing market, according to a report published Thursday.
The National Association of Realtors pending home sales index rose 1.1% to 72.6 from 71.8 in August, the largest increase since January. Economists polled by Reuters had expected a decline of 1.8%.
On a year-over-year basis, pending home sales were down 11%.
The average monthly mortgage cost Americans $2,155 in September versus $2,170 in August, according to another survey released by the Mortgage Bankers Association. After a cycle of aggressive rate hikes by the Federal Reserve meant to target inflation, the average 30-year fixed rated on home loans rose to 7.90% last week, the MBA said on Wednesday.
“Despite the slight gain, pending contracts remain at historically low levels due to the highest mortgage rates in 20 years,” said Lawrence Yun, the NAR’s chief economist. “Furthermore, inventory remains tight, which hinders sales but keeps home prices elevated.”
Pending sales of existing homes rose by the most in the Midwest and Northeast regions. The West was the only region to experience a month-to-month drop in contracts signed, falling by 1.8%.
(Reporting by Amina Niasse; Editing by Andrea Ricci)