U.S. September pending home sales hit a near 12-year low as soaring mortgage rates crush homebuying demand.

As mortgage rates climb back above 7%, the U.S. housing market is cooling further. Last month, sellers cut prices one after another, while the few remaining buyers gained more bargaining power. Seasonally adjusted data from real estate brokerage Redfin shows that signed contracts for existing homes in September plunged 4% month-over-month to the lowest level since 2014, the largest drop in more than three years. At the same time, the supply of homes for sale rose to the highest level since March 2020. "There's been a clear shift in sentiment in the real estate industry," said Daryl Fairweather, chief economist at Redfin. "When rates rise like this, fewer people can afford to buy a home, which means sales are bound to fall." Data from Freddie Mac shows the average rate on a 30-year mortgage jumped from 6.66% at the end of August to 7.4% on October 8, the highest level in nearly three years and more than 1 percentage point higher than a year earlier.