U.S. Pending Home Sales Fall 7.3% in September as Mortgage Rates Rise

U.S. pending home sales fell 7.3% in September as mortgage rates rose, while October builder confidence fell to its lowest level in 14 years, adding to signs of pressure on housing activity.

Signed contracts for existing homes were also 11.3% below their year-earlier level. Pending home sales measure contracts signed before purchases close. The largest monthly declines were in the West, at 9.2%, and the South, at 8.2%.

The average rate on a 30-year fixed mortgage climbed from about 6.8% at the start of September to 7.6% by month’s end. “Housing affordability is more affected by changes in mortgage rates,” said National Association of Realtors Chief Economist Lawrence Yun.

Construction figures also moved lower in September, though the reported changes are estimates. Housing starts ran at a seasonally adjusted annual rate of 1.221 million, an estimated 5.2% below August and 7.4% below September 2025. The August pace was revised to 1.288 million.

An annualized rate expresses one month’s construction pace as a full-year figure; it does not count the homes begun during September alone. Single-family starts ran at an annualized 859,000, down an estimated 4.6% from August. That category is part of the overall starts figure, which also includes multifamily homes.

Permits for single-family homes fell 4%. Permits measure a stage before construction begins, making them distinct from housing starts.

The October homebuilder confidence index fell to its lowest level in 14 years. Survey measures of builders’ views on current sales conditions, future sales expectations and buyer traffic all declined. Those readings describe builders’ assessments and do not establish that actual home sales fell in October.

“Demand persists, but higher mortgage rates, elevated construction costs and weaker consumer confidence are keeping more buyers on the sidelines,” said National Association of Home Builders Chief Economist Robert Dietz. The Federal Reserve is scheduled to meet Oct. 27–28.