Pending home sales of existing homes in the United States dropped to a record low in September, according to data released Tuesday by the National Association of Realtors (NAR). The index of contract signings fell 7.3 percent to 66, marking the weakest reading since the series began in 2001 and exceeding economists’ expectations.

The decline reflects ongoing challenges in the housing market as elevated mortgage rates continue to suppress demand. Rates have been rising since the onset of the conflict in Iran and are currently at their highest level in nearly three years. Compared with September 2025, contract signings are down approximately 13 percent, based on figures not adjusted for seasonal variations.

“This latest setback is largely due to fast-rising mortgage rates,” said NAR chief economist Lawrence Yun. He added that both buyers and sellers appear to be delaying transactions in the hope of more favorable borrowing conditions in the future.

Pending home sales, which typically precede finalized sales by one or two months, serve as a key forward-looking indicator for the housing market. The data showed a nationwide decline, with the Western U.S. experiencing the steepest fall at 9.2 percent. The South, the country’s largest housing market by volume, saw an 8.2 percent drop.

In addition to pending sales, related housing data released on Tuesday indicated a slowdown in new home construction. Groundbreaking activity fell to one of its lowest levels since 2020, underscoring the broader slowdown in the housing sector amid rising interest rates and affordability pressures.

The ongoing combination of high borrowing costs and elevated home prices continues to weigh on market activity, prompting concerns about the pace of recovery in the U.S. housing market.