US mortgage rates price out 6 million home buyers as sales hit record low
Pending home sales dropped 7.3% in September, the lowest level since the index began in 2001, as mortgage rates surged to 7.43%.
When mortgage rates jump from 6% to 7%, nearly 6 million Americans can no longer afford to buy a typical home. In September, rates climbed sharply to 7.43%, pricing out millions of prospective buyers.
Pending home sales, a measure of signed contracts on existing homes, fell 7.3% from August. The median US home price sits around $435,000, and at current rates, the monthly payment now consumes about 40% of the average after-tax income.
Economists say many families, especially first-time buyers, are waiting on the sidelines. Those who locked in low rates years ago are reluctant to move.
Housing starts also fell sharply, down 5.2% in September, as builders struggle with weak demand.
- 7.43%
- Mortgage rate
- 7.3%
- Pending sales decline
- 6 million
- Buyers priced out
- $435,000
- Median home price
Why it mattersHigher mortgage rates make home ownership out of reach for millions, slowing the construction sector and dragging on economic growth.
AustraliaNo direct Australian effect yet, though rising US mortgage rates signal a global shift in credit conditions that could influence Australian banks' lending decisions and property investment returns.
✓ Claims checked against the source and corrected before publish. checked 3 h ago
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