By Scott Kanowsky
Investing.com -- A measure of existing residential housing demand in the U.S. based on contract signings slumped by more than expected in September, according to a forward-looking indicator published by the National Association of Realtors, in a sign that possible buyers are reining in spending in response to sky-high inflation.
The U.S. pending home sales index slipped to 79.5 during the month, falling by 10.2% compared to the reading in August. A level of 100 is equal to the amount of contract activity in 2001.
Analysts had expected a monthly decline of 5.0%.
Meanwhile, on a year-on-year basis, the figure dipped by 31.0%.
"Persistent inflation has proven quite harmful to the housing market," said NAR Chief Economist Lawrence Yun.
Yun added that the Federal Reserve's decision to aggressively raise interest rates has also led to "far fewer" buyers and sellers.
The Fed's moves have subsequently contributed to a surge in mortgage rates, which have in turn lessened the appetite of potential home buyers. Mortgage rates rose past 7% for the first time since 2002 this week.