Pending home sales increased 4% in August compared with July and were up 3.8% compared with August 2024, according to the National Association of Realtors.
Month-over-month, pending home sales increased in the Midwest, South and West but decreased in the Northeast.
Year-over-year, pending home sales increased across all regions.
“Lower mortgage rates are enabling more homebuyers to go under contract,” says Lawrence Yun, chief economist for NAR, in a statement. “In the Midwest, low mortgage rates combined with high levels of affordability are attracting more buyers compared to other regions.”
“As a forward-looking indicator based on contract signings, August’s pending home sales data suggests that while buyers are re-engaging, caution remains,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Improvements in mortgage rates, affordability, and inventory are helping, but not yet driving a full recovery in housing demand.”
“Regionally, the Midwest led the way, offering relative affordability that, when combined with lower mortgage rates, helps make the payment-to-paycheck calculation work for many buyers,” Kushi says. “Purchase mortgage application data from September indicates additional momentum, with buyers responding to lower rates. This suggests that the modest improvement in pending sales may continue into the fall, especially if affordability conditions stabilize.”
“Looking ahead, sales this year will likely depend on ‘life happens’ moments—job changes, marriages, births, and other personal milestones that drive housing decisions,” she adds. “Affordability challenges and structural inventory shortages continue to weigh on buyer activity. Lower rates help, but they are not a panacea for the housing market.”
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