Pending home sales jumped by 7.6%, hitting the highest level since March
Even though mortgage rates are rising again, there are signs the housing market remains strong. The latest sign is the National Association of Realtors Pending Home Sales Index for September, which rose by 7.6% over August. The Index is at its highest level since March.
Pending home sales are one of the real estate industrys most forward-looking indicators because it reflects the number of contracts that were signed during the month but have not yet closed. Its a particularly strong number since the home-buying season usually slows at the end of the summer.
"Contract signings went up in all regions as buyers took advantage of lower mortgage rates in late summer and more options in inventory, said Lawrence Yun, NARs chief economist. We expect more gains if the economy keeps adding jobs, inventory grows, and mortgage rates remain steady."
Looking ahead, Yun predicts slower growth in home prices and an increase in sales over the next two years.
"After slow home sales in 2023 and 2024, we expect existing-home sales to rise to 4.47 million in 2025 and over 5 million in 2026," Yun explained. "Home prices are expected to grow at a slower rate, similar to the consumer price index, due to more supply entering the market."
Yun forecasts the median existing-home price will reach $410,700 in 2025 and $420,000 in 2026. The annual 30-year fixed mortgage rate is expected to drop to 5.9% in 2025 but then rise to 6.1% in 2026.
Regional breakdown
In the Northeast, the Pending Home Sales Index (PHSI) increased by 6.5% from last month to 65.6, which is 3.3% higher than in September 2023. The Midwest index jumped 7.1% to 75.0 in September, the same as the previous year.
The South's PHSI went up by 6.7% to 89.0 in September, unchanged from a year ago. The West saw a significant increase of 9.8% from the previous month to 64.0, which is 12.3% higher than in September 2023.
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Posted: 2024-10-30 15:25:45