Real Estate

U.S. Housing Market Gains Momentum: Pending Sales Rise For Third Month Straight

Real Estate
Real Estate TFP File Photo

The U.S. housing market shows signs of improvement as pending home sales climbed for the third consecutive month in October, according to the National Association of Realtors (NAR). Compared to September, contracts to buy homes increased 2.0%.

All four major U.S. regions saw a rise in pending sales compared to the previous month, with the Northeast experiencing the strongest growth (4.7%). Year-over-year, contract signings were up in every region, with the West leading the pack with a significant 16.8% increase.

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“Homebuying momentum is building after nearly two years of suppressed home sales.” said NAR Chief Economist Lawrence Yun. “Even with mortgage rates modestly rising despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.”

Key Points:

  • The Pending Home Sales Index (PHSI) rose 2.0% to 77.4 in October.
  • Year-over-year, pending transactions climbed 5.4%.
  • SentriLock lockbox usage, an indicator of buyer activity, increased by 7% compared to October 2023.

Regional Highlights:

  • Northeast: PHSI jumped 4.7% from September and 7.2% year-over-year.
  • Midwest: PHSI rose 4.0% in October and 1.8% compared to last year.
  • South: PHSI edged up 0.9% from the previous month and 2.5% year-over-year.
  • West: PHSI increased slightly (0.2%) from September but saw a significant 16.8% rise compared to October 2023.

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This report suggests a positive trend in the U.S. housing market, with buyers returning after a period of slow sales. Rising mortgage rates are a potential concern, but other factors like job growth and more homes available for sale seem to be encouraging buyers to enter the market.

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