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Pending home sales — a measure of signed contracts on existing homes — dipped a much worse-than-expected 10.2% in September from August, according to the National Association of Realtors.

Economists had predicted a 4% plunge. Sales declined 31% year over year.

This represents the lowest level on the pending sales index since June 2010, excluding April 2020, when the Covid pandemic was in its early days.

Realtors pointed to exorbitantly higher mortgage rates, which reached record lows for the first two years of the pandemic. The average rate on the popular 30-year fixed mortgage was right around 3% at the start of this year, but then surged swiftly, blasting above 6% in June, according to Mortgage News Daily. It pulled back a bit in July and August but then rose again, crossing 7% in September, when these contracts were signed.

“Persistent inflation has proven quite harmful to the housing market,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve has had to drastically raise interest rates to quell inflation, which has resulted in far fewer buyers and even fewer sellers.”

Mortgage demand and new listings are declining, too, because homeowners aren’t willing to to give up their record-low interest rates to trade up to a much higher one. Meanwhile, for potential buyers, the rates hikes 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.

“With wages falling behind on account of inflation, and rates rising, buyers’ purchasing power has been reduced by over $100,000,” said George Ratiu, senior economist at Realtor.com.

“As we look to the remainder of the year, we can expect interest rates to continue their upward trajectory. The Federal Reserve’s monetary tightening has not yet made a dent in inflation, which means that the bank is expected to hike its policy rate further,” he added.

Regionally, pending home sales declined 16.2% month to month in the Northeast and were down 30.1% year over year. In the Midwest, sales slumped 8.8% for the month and 26.7% from one year ago.

In the South, sales shed 8.1% for the month and plummeted 30.0% year over year, and in the West, the most expensive region in the nation, sales fell 11.7% for the month and were down 38.7% from the year before.