Declining home sales are a definite economic red flag. Home sales declining at nearly triple the rate you thought they would is, well, a much bigger red flag:
Pending home sales, a measure of signed contracts on existing homes, dropped a much worse-than-expected 10.2% in September from August, according to the National Association of Realtors.
Economists had predicted a 4% decline. Sales were down 31% year over year.
This marks the lowest level on the pending sales index since June 2010, excluding April 2020, when the Covid pandemic was in its early days.
Economists who called for a 4% decline:
Don't worry, though, it's not all bad! Oh wait yes it is:
Mortgage demand and new listings are dropping, too, because homeowners are unwilling to give up their record-low interest rates to trade up to a much higher one. For potential buyers, the increase in rates means the monthly payment on a median-priced home, with a 20% down payment, is now close to $1,000 higher than it was in January.
Ten months ago you were thinking of trading up for a bigger house with a nice patio. But Joe Biden's economy be like:
