Pending Home Sales Jump To The Highest Level Since March

KEY TAKEAWAYS

• The National Association of Realtors’ Pending Home Sales Index increased by 7.4% in September, far more than expected.
• The index reached its highest level since March, and pending home sales increased year over year for the first time since November 2021.
• Forecasters predict house prices will fall and bring hesitant buyers back into the market in the new year.

Pending home sales jumped more than expected in September as buyers encountered lower housing costs and more inventory.

The National Association of Realtors’ Pending Home Sales Index saw a rapid increase in the number of homes that went under contract in September. The forward-looking indicator jumped 7.4% compared to August and landed at its highest level since March. This exceeded economists’ expectations of a 0.7% monthly increase, according to a survey by Dow Jones Newswires and The Wall Street Journal.

Contract signings increased by 2.6% compared to the same time last year. This was the first year-over-year increase since November 2021.

“Contract signings rose across all regions of the country as buyers took advantage of the combination of lower mortgage rates in late summer and more inventory choices,” said Lawrence Yun, chief economist for NAR.

Homebuyers Can Expect To Find Slowing Housing Prices In 2025

The S&P CoreLogic Case-Shiller U.S. National Home Price Index grew 4.2% annually in August. While that was still an all-time it was also the fifth month in a row that price growth slowed. If inflation stays on its downward path, mortgage rates will likely fall and homebuyers can expect housing prices to moderate in the next year.

“As mortgage rates fall, the housing market should benefit as more buyers and sellers alike test the water,” Bill Adams, chief economist for Comerica Bank wrote in a commentary. “Many Americans have delayed decisions to upsize, downsize, or relocate during the last few years’ housing market lockup, and that delayed activity is going to start flowing in 2025 as mortgage rates become less high.”