Pending homes sales are flat, but that’s a good thing

Pending homes sales are flat, but that’s a good thing

SIGN Contract Pending outside house

The number of home sales waiting to close was flat in September when compared to a year ago. While that may not sound too impressive, it marks the first time since January that pending sales did not decline, according to a report from Redfin, the residential real estate brokerage and mortgage origination service.

The report states that pending home sales increased year over year in 27 of the 50 largest U.S. metropolitan areas, the most since January. The uptick in pending sales may signal the market is at a turning point. Redfin does note that they are comparing a period last year when sales slumped as mortgage rates shot above 7%. Nonetheless, a variety of home-sale indicators, including home tours and mortgage-rate locks, are also increasing.

The cities where pending sales increased the most include Phoenix, which saw the biggest jump at 13%. It was followed by San Jose (12%) and Portland, Oregon (10%).

On the other end of the spectrum, Redfin reported that Florida was facing a major slowdown in pending home sales, mainly because of natural disasters and rising insurance costs and homeowners association (HOA) fees. Pending sales fell 18% year over year in West Palm Beach, the most anywhere in the country. Fort Lauderdale and Miami were not far behind, with both cities showing a 16% drop in pending sales.

Redfin cited the recent lower mortgage rates as the main reason for the pending sale increases. While the 30-year mortgage rate has begun to rise in recent weeks, it is still well below the highs of 7.22% reached in early May of this year.

Redfin’s homebuyer demand index, which measures tours and other buying services from company agents, was up 9% month over month in September to its highest levels since April. Mortgage purchase applications also were up 10% month over month, and homebuyers locked in more than twice as many mortgages in September than they did a month earlier.

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