Buyers signed fewer contracts for homes in California last month, as higher mortgage rates hampered demand, according to a new report.
Pending home sales fell 5% in August from July, the California Assn. of Realtors said Monday. The group’s pending-sales index dropped 9% from last year. The index represents contracts signed but not yet closed -- a sign of future market activity.
“Rising interest rates over the past several months at the specter of a tapering of the Fed’s stimulus program sent buyers to the sidelines in August,” the association's chief economist, Leslie Appleton-Young, said in a statement.
Still, Appleton-Young said the Federal Reserve’s decision last week to maintain its massive bond-buying program should send mortgage rates lower, helping out prospective buyers.