Pending home sales fell 1.1% month to month in October but were 20.2% higher compared with October 2019.

Strong, pandemic-induced demand for housing is still there, but buyers may now be hitting an affordability wall.

Pending home sales fell 1.1% month to month in October but were 20.2% higher compared with October 2019. This reading is a measure of signed contracts on existing homes, so it is a future indicator of closed sales.

It is also, therefore, a more recent read on buyer activity because it represents people out shopping during the month and making purchase decisions. Analysts expected a small monthly gain.

“The housing market is still hot, but we may be starting to see rising home prices hurting affordability,” Lawrence Yun, chief economist for the National Association of Realtors, said in a release.

Mortgage rates hovered near historic lows during the month, but the supply of homes for sale also hit another historic low. The number of homes for sale at the end of October was down nearly 20% annually and represented just a 2.7-month supply at the current sales pace. A six-month supply is considered a balanced market between buyer and seller.

The growing imbalance has prompted bidding wars and caused the median price of an existing home to jump to the highest level ever in October, according to the Realtors. At $313,000, it was up 16% annually. Supply is especially lean on the low end of the market.