Home sales contracts picked up last month as lower mortgage rates helped buyers
10/30/2024 21:50
Housing contract activity jumped 7.4% in September as buyers took advantage of lower mortgage rates and more inventory.
A measure of housing contract activity jumped 7.4% in September as buyers took advantage of lower mortgage rates and higher inventory.
The Pending Home Sales Index, which tracks contract signings on existing homes, rose to 75.8 from a month earlier and registered the highest reading since March, according to the National Association of Realtors. A reading of 100 is equal to the level of contract activity in 2001.
Compared to a year earlier, pending contracts rose 2.6%.
Housing contract activity rose in all regions of the US, led by the West, which jumped 9.8% from a month earlier and 12.3% compared to September 2023. The Midwest reported a 7.1% month-over-month gain.
“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,” NAR’s chief economist Lawrence Yun said in a statement. “Further gains are expected if the economy continues to add jobs, inventory levels grow, and mortgage rates hold steady.”
But mortgage rates have been on the rise in recent weeks, giving buyers and sellers additional pause just as the housing market enters its seasonal slowdown. The average interest rate on a 30-year mortgage was 6.54% last week, according to Freddie Mac data, up from as low as 6.08% in late September. In the past few days, rates have climbed north of 7%, according to Mortgage News Daily.
Read more: Mortgage rates are still increasing — is this a good time to buy a house?
Home sales are on track for another sluggish year as prices hover near record levels and buyers and sellers adjust to higher mortgage rates. Existing home sales in September slipped 1% to an annual rate of 3.84 million, according to NAR data released last week.
Yun expects sales to pick up next year to around 4.47 million and cross 5 million in 2026. Home price appreciation may slow to track inflation as more supply hits the market.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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