Pending home sales were flat in September compared with August and were down 0.9% compared with September 2024, according to the National Association of Realtors (NAR).
Regionally, and month-over-month, contract signings were up 3.1% in the Northeast and 1.1% in the South but were down 3.4% in the Midwest and 0.2% in the West.
“Contract signings matched the second-strongest pace of the year, says Lawrence Yun, chief economist for NAR, in a statement. “However, signings have yet to fully reach the level needed for a healthy market despite mortgage rates reaching a one-year low. A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market.”
“Inventory has climbed to a five-year high, giving home buyers more options and room for price negotiation,” Yun adds. “Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity.”
NAR’s REALTORS Confidence Index survey for September shows that 20% of NAR members expect an increase in buyer traffic over the next three months, up slightly from 19% last month and down slightly from 21% one year ago.
Meanwhile, 19% expect an increase in seller traffic, unchanged from last month and down slightly from 20% in September 2024.
“While September’s pending home sales headline number appears flat relative to August, the underlying data tells a more nuanced story,” says Sam Williamson, senior economist for First American, in a statement. “As a forward-looking indicator based on contract signings, the data suggests that lower mortgage rates, improved affordability, and higher inventory are pulling more buyers back into the market, with signings matching their second-strongest pace of the year. Still, many buyers remain cautious, despite mortgage rates hitting a one-year low.”
“The South led the way, posting both month-over-month and year-over-year gains. Its relative affordability – especially when paired with lower mortgage rates– continues to support buyer activity by making the payment-to-paycheck equation more manageable,” Williamson adds. “The Northeast saw a modest rebound from August, but remains essentially flat compared to last year, while the Midwest gave back some of its August strength, with declines on both a monthly and annual basis. Meanwhile, the West continues to lag, remaining the softest region for signings.”
“The purchase mortgage application data from October indicates additional momentum, with buyers responding to lower rates,” Williamson says. “While they’re below September’s strong pace, this suggests that the modest improvement in pending sales may continue into the fall, especially if affordability conditions stabilize.”
Photo: Dillon Kydd