Pending home sales rose across all regions of the U.S. in August as lower mortgage rates opened a rarely cracked window of affordability, attracting buyers.

The number of homes under contract last month increased 4% from July and 3.8% year over year, according to newly published figures from the National Association of Realtors (NAR).

Pending sales were especially strong in the Midwest in August, rising 8.7% from July and 6.7% annually. Pending sales in the South rose 3.1% monthly and 4.2% annually.

The West observed a 5% monthly rise in pending sales, but only 0.2% growth annually. Pending sales declined 1.1% in the Northeast from July but increased 2.6% year over year.

“Lower mortgage rates are enabling more homebuyers to go under contract,” commented Lawrence Yun, chief economist of NAR, in a press release. He attributed the Midwest’s outperformance to “low mortgage rates combined with high levels of affordability.”

Properties in most U.S. counties remained unaffordable compared to their historical average through the third quarter, underscoring the impact that marginal improvements in mortgage rates or list prices make on the sales side.

The Mortgage Bankers Association recently reported that the national median payment applied for by homebuyers seeking a mortgage in August fell $27 from July to $2,100 — but remained $43 higher than a year ago, a 2.1% increase.

The annualized pace of existing-home sales slowed to 4 million units in August, according to NAR, reflecting a 1.8% rise in sales year over year but on pace to match 2024’s three-decade low.

The Realtors Confidence Index for August showed 28% of existing-home sales were to first-time homebuyers, unchanged from July, and 28% of transactions were cash sales, down from 31% in July and up from 26% in August 2024.

Only 1 in 5 Realtors polled expects an increase in buyer or seller traffic over the next three months, reflecting the affordability stalemate separating buyers and sellers as consumers’ overall attitudes about the economy sour.