(NEW YORK) -- The number of Americans who signed contracts to buy homes dropped sharply in September, reflecting higher mortgage rates and home prices that have made purchases more costly. The National Association of Realtors says its seasonally adjusted pending home sales index fell 5.6 percent to 101.6, the lowest level in nine months. The decline pushed the index below its year-ago level, the first time that's happened in nearly two and a half years.
There is generally a one- to two-month lag between a signed contract and a completed sale. The drop suggests final sales will decline in the coming months.
Mortgage rates reached a two-year high in August and remained elevated in September. But they have fallen in the past month, which could help boost contract signings in October.
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