Pending home sales fell an unexpected 2.3% in September compared with August, according to the National Association of Realtors.

Pending home sales, which are a measure of signed contracts to buy existing homes, fell an unexpected 2.3% in September compared with August, according to the National Association of Realtors.

Analysts were predicting a slight monthly gain. Sales were 8% lower compared with September 2020.

Pending sales are a forward-looking indicator of closed sales in one to two months.

Sales may have dropped due to higher mortgage rates. The average rate on 30-year fixed-rate mortgages fell below 3% in July and stayed there until the first week of September, according to Mortgage News Daily. Then it began rising and crossed over 3%, ending the month at 3.15%.

Buyers are also still contending with very high home prices. Price gains have been close to 20% year over year. There was a sign, however, in August that the market was cooling, with fewer bidding wars and slightly more supply coming up for sale.