Pending home sales in October dropped to the lowest level since the National Association of Realtors began tracking them in 2001.
Pending home sales, a measure of signed contracts on existing homes, dropped 1.5% in October from September. They hit the lowest level since the National Association of Realtors began tracking this metric in 2001, meaning it’s even worse than readings during the financial crisis more than a decade ago. Sales were down 8.5% from October of last year.Because the index measures signed contracts, it is the most recent indicator of housing demand. It reflects the buyers who were out shopping in October, which was when the popular 30-year fixed mortgage rate briefly shot higher than 8%. Rates have since pulled back to around 7.3%, according to Mortgage News Daily. The realtors continue to say it’s not just high rates but still very low supply of homes for sale that is deflating activity. Tight supply and still-strong demand have kept pressure on home prices, which not only continue to hit new highs but appear to be accelerating in their gains. The Realtors noted that sales of homes priced above $750,000 have been increasing simply because there is more supply on the high end of the market.
In Puerto Rico: Mortgage originations decrease
In the second quarter of 2023, 3,290 mortgages originated in Puerto Rico, 14.7% less than in the same period last year, according to data from the Office of the Commissioner of Financial Institutions (OCIF). In the first half of the year, 6,114 mortgages originated, 22.5% less than in the same period last year. The value of mortgage loans fell 15.2%, to $949.5 million. During the first quarter, the average mortgage was $288,600, down 0.6% when compared to the same period last year. 44.5% of mortgages were originated by banks, some 1,465 loans, 11.3% less than last year. The value of these mortgages was $686.9 million, 9.4% less when compared to last year.
Value of Generated Mortgages
For their part, non-depository institutions (those only dedicated to generating mortgages) originated 17.2% fewer second mortgages than in the 2022 quarter, 1,825 mortgage loans compared to 2,204 last year. The value of these mortgages decreased 27.2%, to $262.6 million. Last year, 14,066 mortgages originated in Puerto Rico, 30.1% less than in 2021 and the lowest figure in the last four years. The value of mortgage loans fell 3.4%, to $4,029.2 million. The average mortgage was $286,450, up 38.2% from last year.
