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Pending home sales recorded a 1.1% uptick from August to September, according to data from the National Association of Realtors (NAR), which also noted pending transactions were down 11% from one year earlier.

NAR’s Pending Home Sales Index (PHSI) for September had a 72.6 reading – an index of 100 equals the level of contract activity in 2001. All four U.S. regions recorded year-over-year declines in transactions, although three – the Northeast, Midwest and South – posted monthly gains in transactions while the West experienced a decline in activity.

“Despite the slight gain, pending contracts remain at historically low levels due to the highest mortgage rates in 20 years,” said Lawrence Yun, NAR chief economist. “Furthermore, inventory remains tight, which hinders sales but keeps home prices elevated.”

NAR is predicting existing-home sales will decrease 17.5% in 2023, settling at 4.15 million before rising 13.5%, to 4.71 million in 2024. The trade group is also forecasting housing starts will drop 10.4% from 2022 to 2023, to 1.39 million, before rising to 1.48 million, or 6.5%, in 2024.

“Because of homebuilders’ ability to create more inventory, new-home sales could be higher this year despite increasing mortgage rates,” Yun added. “This underscores the importance of increased inventory in helping to get the overall housing market moving.”