(Reuters) – Contracts to purchase previously owned U.S. homes fell by the most in more than three years in September, a sign that a softer economy and a rise in mortgage rates are hurting the country’s housing market.
The National Association of Realtors said on Monday its Pending Homes Sales Index, based on contracts signed last month, plunged 5.6 percent to 101.6, the fourth monthly fall in a row. Economists polled by Reuters had forecast a slight increase.
Mortgage rates have risen sharply since May on bets that the U.S. Federal Reserve would soon begin winding down a stimulus program, although rates have eased slightly in recent weeks.
Many investors believe the Fed will keep its bond buying stimulus at full throttle given recent signs the U.S. economy lost a step in September.