Housing: U.S. pending home sales fell for third-straight month

Yahoo Finance's Dani Romero joins the Live show to discuss August pending home sales data, rising mortgage rates, volatility, and the state of the U.S. housing market.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Let's dig further into today's pending home sales, as would-be homebuyers eye a 30-year mortgage rate north of 7%. Yahoo Finance's Dani Romero--

JULIE HYMAN: Oh, I said 6% and I was outdated, Dani.

BRIAN SOZZI: Can't even keep up--

DANI ROMERO: Yeah, I know.

BRIAN SOZZI: --any more.

DANI ROMERO: [LAUGHS] I know, right? The volatility. Well, that goes back to what we're seeing today, the pending home sales. They fell for the third consecutive month. And that's all due to the volatility that we've been seeing in mortgage rates, the upward and downward movement.

And that is the primary mover for homebuying. That's what economists are calling now. And they say that due to these high-interest rates, it is really cutting into those contract signings. And they're expecting that the economy will remain sluggish and that mortgage rates will touch close to 7% in the coming months.

But again, we can't really-- we're just estimating that. Of course, but the housing market is really going through a rebalancing right now. And rent prices are offering little relief to potential homebuyers right now, as well. And so conditions may get worse before they get better. And especially as the Fed continues to increase interest rates. So that is something on the table.

But again, mortgage rates are likely going to rise in the coming months. And not only that, but on the other side of this equation, is that sellers are saying that they are feeling a softening in buyer demand because of the price reductions that are happening right now. And so that could be a good sign for people who are looking to buy right now.

JULIE HYMAN: Well, and also, if you're gonna sell your house, and you're thinking about the next house that you're gonna buy, and you're looking at 6% mortgage rates, and then you're maybe not gonna sell your house right now. Maybe you're gonna stay in it a little longer.

DANI ROMERO: That's a conversation I had with my dad just earlier. You feel locked in, right? You feel locked in. You're like, oh, I paid 3%. And then now, it's 6%. So why am I going to move and pay a higher--

JULIE HYMAN: You'd have to get a big profit on your house in order to make that worth it.

DANI ROMERO: Like a million.

BRIAN SOZZI: 10 years before I could buy my mansion. Dani Romero, thanks so much.