Fewer Americans sign contracts to buy homes in October

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

Pending Home Sales (Copyright 2020 The Associated Press. All rights reserved.)

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.

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.

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.

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.

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.