O
ctober 2025 saw a modest rise in pending home sales, driven by lower borrowing costs and improved sentiment, yet the index still trails last year’s levels, according to the National Association of Realtors (NAR). The Pending Home Sales Index increased 1.9% from September, with gains in the Northeast, Midwest, and South, while the West slipped. Nationally, pending sales dipped 0.4% from October 2024, with the Midwest and South posting year‑over‑year gains that were offset by declines in the Northeast and West.

    The index, a key gauge of future sales activity, measures contracts that have not yet closed. NAR’s latest Realtor Confidence Index signals waning optimism as the winter approaches: only 17% of agents expect higher buyer traffic in the next three months, down from 20% in September and 19% a year earlier. Expectations for seller traffic fell to 16% from 19% last month and in October 2024.

    NAR chief economist Lawrence Yun attributes the Midwest’s relative strength to its affordability advantage, noting that contract signings have slowed in the pricier West. He also highlights that seasonal patterns may benefit buyers, as market days lengthen from November through February, giving buyers more negotiating power. Yun added that September’s job growth, following a data blackout, signals the economy is not heading toward recession, potentially boosting confidence in future home buying.

    Regionally, October’s performance was led by a 5.3% month‑over‑month rise in the Midwest, which also saw a 0.9% year‑over‑year increase. The South gained 1.4% month‑over‑month and 2% year‑over‑year. The Northeast rose 2.3% month‑over‑month but remained 1% below last year. The West was the only region to decline, falling 1.5% month‑over‑month and 7% year‑over‑year.

    Despite affordability challenges, the modest uptick in contract activity suggests that easing mortgage rates and solid employment may set the stage for a more active housing market in 2026.