Pending Sales Soared In September On Lower Rates

Pending home sales rode the low-rate wave in September, continuing an upward trend.

NAR’s Pending Home Sales Index increased 7.4% month-over-month to a reading of 75.8, besting a 0.6% bump in August to reach its highest level since March.

An index of 100 is equal to the level of contract activity in 2001, when NAR began tracking this data.

Year-over-year, sales turned around to rise 2.6%.

“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 NAR Chief Economist Lawrence Yun. “Further gains are expected if the economy continues to add jobs, inventory levels grow, and mortgage rates hold steady.”

Signings rose in all four regions on the month, while Northeast and West saw gains YOY.

The Central Bank cut rates by a half-point in September, leading to a serious decline in borrowing costs. Buyers and sellers took advantage, sparking both purchase and refinance activity.

Rates have ascended since then, averaging 6.73% last week, as uncertainty surrounding the presidential election and November’s FOMC meeting led Wall Street to price in less favorable outcomes.

Still, the market is expected to improve in the coming years.

“After two years of sluggish home sales in 2023 and 2024, existing-home sales are forecasted to rise to 4.47 million in 2025 and more than 5 million in 2026,” Yun said. 

During the next two years, Yun predicts a slower rate of growth in home prices that’s roughly in line with the consumer price index because of additional supply reaching the market.