Pending Home Sales Jump To The Highest Level Since March

Pending home sales jumped more than expected in September as buyers faced lower housing costs and increased inventory.

The National Association of Realtors’ Pending Home Sales Index saw a rapid increase in the number of homes going under contract in September. The forward-looking index jumped 7.4% compared to August and fell to its highest level since March. This exceeded economists’ expectations for a monthly increase of 0.7%, according to a poll conducted by the National Economic Institute Dow Jones Newswires and The Wall Street Journal.

The rate of signing contracts increased by 2.6% compared to the same period last year. This was the first year-on-year increase since November 2021.

“Contract signings rose in all regions of the country as buyers benefited from the combination of lower late-summer mortgage rates and more inventory options,” said Lawrence Yun, chief economist at NAR.

Homebuyers can expect to find housing prices slowing in 2025

The S&P CoreLogic Case-Shiller National Home Price Index grew 4.2% annually in August. While this is still an all-time high, it was also the fifth month in a row that price growth slowed. If inflation remains on a downward path, mortgage rates will likely decline, and homebuyers can expect home prices to moderate next year.

“With mortgage rates lower, the housing market should benefit as more buyers and sellers alike test the waters,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “Many Americans have put off decisions to upsize, downsize or move during the housing market shutdown of the past few years, and this delayed activity will begin to flow in 2025 as mortgage rates become less high.”