October pending home sales up 2.0%
October continued a winning streak for pending home sales with the third straight month of gains. Despite a slight rise in interest rates, potential homebuyers were spurred on by more housing inventory and an upswing in the job market. Pending home sales in October rose 2.0% month-over-month, according to the National Association of Realtors® (NAR). The Pending Home Sales Index (PHSI) was 77.4 in October.
All four regions saw increases from September, and pending transactions were also up 5.4% from a year ago.
- Northeast: up 4.7% to 68.7, up 7.2% from October 2023
- Midwest: up 4.0% to 77.8, up 1.8% from October 2023
- South: up 0.9% to 90.0, up 2.5% from October 2023
- West: up 0.2% to 64.1, up 16.8% from October 2023
"It's encouraging to see contract signings increasing in all major regions of the country," said NAR Chief Economist Lawrence Yun.
Positive outlook from NAR
This report continues to provide an encouraging perspective on the housing market. With increased pending home sales, the rise in mortgage rates seems to have a negligible influence. "More notable gains from a year ago occurred in the expensive regions of the Northeast and West. The record-high stock market is providing a boost for upper-end home buyers” said NAR Chief Economist Lawrence Yun.
Despite slightly rising mortgage rates currently in play, Yun sees hopeful economic factors signaling continued gains in the housing market on the horizon. "Homebuying momentum is building after nearly two years of suppressed home sales. Even with mortgage rates modestly rising despite the Federal Reserve's decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market."
Led by the Northeast, all the four major U.S. regions showed month-over-month gains in transactions. Contract signings increased year-over-year in all four U.S. regions, with the West making the most gains.
Nobody can accurately predict the future of the housing market. However, optimism abounds for 2025, with signs to pointing to the new year as a perfect opportunity for first-time homebuyers. Due to ever-evolving market conditions, what holds true for the national housing market may not apply to your home region. That’s why it’s crucial to work with a local loan officer.
Source: https://www.nar.realtor/newsroom
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