September pending home sales up 7.4%
September was a good month to be on the market as potential homebuyers were able to take advantage of lower mortgage rates and an increase in home listings. Pending home sales in September rose 7.4% month-over-month according to the National Association of Realtors® (NAR). The Pending Home Sales Index (PHSI) was 75.8 in September.
All four regions saw increases from August and pending transactions were also up 26% from a year ago.
- Northeast: up 6.5% to 65.6, up 3.3% from September 2023
- Midwest: up 7.1% to 75.0, unchanged from September 2023
- South: up 6.7% to 89.0, unchanged from September 2023
- West: up 9.8% to 64.0, up 12.3% from September 2023
“Contract signings rose across all regions of the country as buyers took advantage of the combination of lower mortgage rates in late summer and more inventory choices,” said NAR Chief Economist Lawrence Yun. “Further gains are expected if the economy continues to add jobs, inventory levels grow and mortgage rates hold steady.”
Optimistic forecast from NAR
This report is definitely good news and somewhat surprising after seeing a dip in existing-home sales for the same time period. Also, mortgage rates have increased in October, perhaps blunting the positive momentum we’ve seen in pending home sales over the last two months.
However, despite uncertain headwinds in the housing market now, Yun sees positive economic factors leading to an improved housing market over the next couple of years. “After two years of sluggish home sales in 2023 and 2024, existing-home sales are forecasted to rise to 4.47 million in 2025 and more than 5 million in 2026. During the next two years, expect a slower rate of growth in home prices that’s roughly in line with the consumer price index because of additional supply reaching the market.”
This slower rate of home price growth is predicted to be around $410,700 for the median existing-home price in 2025 and $420,000 in 2026. Mortgage rates are also predicted to trend in a positive direction, sliding to 5.9% next year before increasing slightly to 6.1% in 2026.
While it’s incredibly hard to predict where the market is going, if these predictions turn out to be correct, 2025 will offer a great opportunity for first-time homebuyers. But market conditions are constantly changing and what’s true nationally may not be true where you live. That’s why it’s so important to work with a local loan officer.
Source: https://www.nar.realtor/newsroom/pending-home-sales-edged-up-0-6-in-august
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