C
ontract signings are still below target, but NAR’s chief economist says pending sales are moving at one of the year’s fastest rates, and inventory continues to rise. The latest home‑sales data appear muted, yet a closer look shows emerging momentum and growing buyer confidence. The Pending Home Sales Index held steady in September versus August, falling only 0.9% year‑over‑year, matching the second‑strongest pace of the year, says Lawrence Yun. Existing‑home sales increased, and contract signings grew most in the Northeast and South, hinting at future regional upticks.
Yun cautions that contract signings have not yet reached the level needed for a robust market, even as mortgage rates hit a one‑year low. “A record‑high stock market and rising housing wealth in September were insufficient to offset a likely softening job market,” he explains. Mortgage applications for home purchases jumped 20% year‑over‑year in mid‑October, and first‑time buyers made up 30% of existing‑home sales in September, up from 26% a year earlier.
A new CNBC Housing Market Survey shows 72% of agents expect rates to fall further, which may delay purchases. Yet LendingTree’s Matt Schulz urges those on the sidelines to consult lenders, as recent rate drops could already translate into savings. Freddie Mac reported the 30‑year fixed rate at 6.19% last week, the lowest in over a year, and a LendingTree analysis found that rate cuts from January to July saved buyers an average of $40,000 over a 30‑year loan or lowered monthly payments by about $112. With further declines, savings could be larger.
Lower rates also help buyers counter rising home prices, which are up roughly 2% annually—slower than recent years but still above most markets. Yun notes that inventory has reached a five‑year high, giving buyers more options and bargaining power. The combination of lower rates and a five‑year high inventory is expected to improve affordability for many buyers. “Mortgage rates are trending toward three‑year lows, which should improve affordability, though a government shutdown could temporarily slow sales activity,” he adds.
