Pending home sales rose in October after remaining flat from August to September, though they declined overall from a year ago, newly released housing figures show.
The National Association of Realtors (NAR) reports that pending home sales declined 0.4% nationally from October 2024 — despite mortgage rates around the same levels as a year ago.
Last month’s annual increase in home contract signings in the Northeast, Midwest and South were balanced by declines in the West.
Pending home sales were 1.9% higher nationally over the month, led by 2.3% increases in the Northeast and 5.3% increases in the Midwest. The South and West also observed monthly increases in pending home sales of 1.4% and 1.5%, respectively.
“The regional story is about relative affordability,” said Sam Williamson, senior economist at title insurance provider First American Financial Corp., in a statement shared with Scotsman Guide.
Williamson sees a housing market “gradually healing as affordability improves at the margin, inventory loosens a bit, and life events continue to drive buyers into the market.”
Pending contracts provide an indicator of upcoming closed home sales, though the duration between pending contracts and completed sales varies due to numerous factors, such as difficulty obtaining financing or inspection complications.
Some pending sales are canceled or fall through, never translating to closed sales.
“Job gains in September, following the data blackout, are reassuring and suggest the economy is not slipping into a recession,” said NAR Chief Economist Lawrence Yun in a press release. “This may boost confidence in future homebuying.”
The longest government shutdown in U.S. history ended on Nov. 12. It lasted 43 days, during which time almost all federal data collection and reporting was temporarily paused.
A delayed jobs report for September, published last week by the U.S. Bureau of Labor Statistics, revealed hiring and unemployment both ticked up in September.
In a statement shared with Scotsman Guide, chief economist of multiple-listing service Bright MLS, Lisa Sturtevant, said a drop in mortgage rates and increased inventory unleashed some pent-up demand in October.
However, she noted that a K-shaped housing market remains, with “pockets of weakness in consumer spending” emerging ahead of the holiday shopping season.
“The fundamentals of the U.S. housing market are still strong,” said Sturtevant. “But affordability challenges are going to characterize the housing market for years.”
