Pending home sales in the US climbed more than projected last month amid gains across all regions of the country, as reported by the National Association of Realtors on Wednesday. The forward-looking indicator of home sales based on contract signings jumped 7.4% sequentially in September to a 75.8 index reading, marking the highest level since March.
Analysts were modeling for a 1.9% increase in the NAR's pending home sales index, reflected in a Bloomberg survey. All four regions monitored in the NAR index posted mid- to high-single-digit month-over-month sales gains, led notably by the West. NAR Chief Economist Lawrence Yun stated, "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.
Further gains are expected if the economy continues to add jobs, inventory levels grow, and mortgage rates hold steady." On an annual basis, pending transactions rose 2.6%, contrasting with the decline of 1.1% that analysts expected. After a sluggish 2023 and 2024, existing-home sales are projected to rise to 4.47 million in 2025 and exceed 5 million the following year, according to Yun.
“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,” he noted. The NAR anticipates the median existing-home price will increase to $410,700 next year, followed by a rise to $420,000 in 2026.
Earlier this month, Redfin (RDFN) reported that home prices increased by 3.9% to $428,212 in September from the same point in 2023. The annual 30-year fixed mortgage rate is anticipated to dip to 5.9% in 2025, followed by a rise to 6.1% in 2026, according to the real estate association’s forecast.
As of October 24, Freddie Mac data indicated that the average 30-year fixed mortgage rate increased to 6.54%. The NAR reported last week that US existing home sales dipped 0.1% sequentially in September, defying expectations for a small rise. Both the single- and multi-family components edged lower.
Meanwhile, new home sales rose 4.1% month over month in September, as demonstrated by data from the Census Bureau and the Department of Housing and Urban Development..