Pending home sales fell hard in October, as canceled deals and price cuts skyrocketed.
A new report from Redfin showed pending sales fell 32.1% year over year. That marks the largest decline in Redfin’s history of tracking the data since 2013.
The data showed that about 60,000 home-purchase agreements fell through. That’s equal to a record 17.9% of homes that went under contract. And 23.9% of homes for sale experienced a price drop, double the rate of last year at this time.
With mortgage rates hovering around 7% last month, sellers adopted a shelter-in-place mindset. This drove a 24% year-over-year decline in new listings.
Redfin says this is the “steepest decrease on record” since April 2020, the beginning of the pandemic.
Redfin’s Economics Research Lead Chen Zhao said the signs were “promising”: inflation is cooling and rates have started to drop. This might entice buyers to return to the market and sellers to reconsider slashing their prices.
But, sale prices have room to fall, Redfin says. The median U.S. home sale price declined 1.4% month over month. This is the largest slowdown during any October since 2012—but was up 4.9% from a year earlier.
Homes that sold in October were on the market for a median of 35 days. That’s up from 21 days a year earlier. Less than half (44.6%) of home offers written by Redfin agents faced competition. That compares with more than two-thirds (67.3%) in October 2021.