Pending home sales in September showed no change from the prior month and fell 0.9% year-over-year, according to the National Association of Realtors® (NAR) Pending Home Sales Report. The report provides the real estate ecosystem, including agents and homebuyers and sellers, with data on the level of home sales under contract.
Month-over-month and year-over-year pending home sales rose in the Northeast and South but declined in the Midwest and West.
“Contract signings matched the second-strongest pace of the year,” said NAR Chief Economist Lawrence Yun in a statement. “However, signings have yet to fully reach the level needed for a healthy market despite mortgage rates reaching a one-year low. A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market.
“Inventory has climbed to a five-year high, giving homebuyers more options and room for price negotiation. Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity.”
Realtor.com® Sr. Economic Research Analyst Hannah Jones noted that easing inflation and a cooling job market have tempered market expectations, bringing welcome relief to borrowers.
“The modest improvement in affordability conditions helped draw some sidelined buyers back into the market, lifting pending home sales,” she said. “With mortgage rates easing to their lowest level in over a year, more buyers could soon see the market shift from unaffordable to attainable. For those on the cusp, recent research underscores the importance of shopping around for a lender and improving credit scores, both of which can meaningfully reduce borrowing costs. As we move into late fall, the combination of lower rates, ample inventory and softening prices could create a more favorable window for buyers hoping to close before year-end.”
Bright MLS Chief Economist Lisa Sturtevant had thought sales would be up in September even with overall buyer activity remaining low.
“Lower rates have been bringing some buyers into the market, but according to data from the Mortgage Bankers Association, the recent drop in rates has primarily increased refinance activity rather than purchase activity,” she said. “Affordability is still a constraint even as rates have fallen to their lowest level in a year. And consumers are generally feeling more cautious amidst growing economic uncertainty. “
Sturtevant predicted that sales would likely continue to be slow through the fourth quarter, but expected a lot of regional variation. “Markets with stronger regional economies will see more robust buyer activity, while markets being hit by furloughs and layoffs could see a further pullback in home sales activity this winter,” she said.
September’s REALTORS® Confidence Index survey shows that 20% of NAR members expect an increase in buyer traffic over the next three months, up slightly from 19% last month and down slightly from 21% one year ago. Meanwhile, 19% expect an increase in seller traffic, unchanged from last month and down slightly from 20% in September 2024.
Regional pending home sales numbers were as follows:
Northeast
- 3.1% increase month-over-month
- 0.5% increase year-over-year
Midwest
- 3.4% decrease month-over-month
- 1.5% decrease year-over-year
South
- 1.1% increase month-over-month
- 0.9% increase year-over-year
West
- 0.2% decrease month-over-month
- 5.3% decrease year over year
