Pending Home Sales Rise as Lower Rates Spark Buyer Activity in October

Pending home sales showed a slight pickup in October, offering early signs that easing mortgage rates helped bring some buyers back into the market. According to new data from the National Association of Realtors (NAR), contract signings rose 1.9% from September, even though they remained 0.4% below year-ago levels.

The Pending Home Sales Index reflects the number of homes under contract, serving as a leading indicator for future closings. While NAR’s full home sales report is still pending, October’s contract activity suggests buyer interest is slowly strengthening as affordability conditions improve.

Regional Breakdown Shows Clear Divide

Contract activity varied widely across the country, with three regions reporting monthly gains:

Northeast

• +2.3% MoM
• –1.0% YoY

Midwest

• +5.3% MoM
• +0.9% YoY

South

• +1.4% MoM
• +2.0% YoY

West

• –1.5% MoM
• –7.0% YoY

NAR Chief Economist Lawrence Yun pointed to affordability differences as the biggest driver.
“The Midwest stood out because homes are more reasonably priced, while the West where prices are higher saw buyers pull back,” Yun said. He also noted that the seasonal slowdown between November and February usually gives buyers more negotiating room.

Despite limited data due to the federal data blackout, Yun said recent job gains in September suggest the economy remains healthy, which may encourage hesitant buyers.

Buyer Traffic Slows Slightly as Holiday Season Begins

NAR’s latest member survey shows that expectations for buyer and seller activity softened slightly heading into the winter months:

• 17% of agents expect more buyer traffic (down from 20% in September)
• 16% expect more seller traffic (down from 19% one year ago)

Even with lower expectations, economists say October’s pending sales increase likely reflects pent-up demand finally surfacing.

Lower Rates and More Inventory Provided a Boost

“Pending sales increased between September and October, helped by a temporary dip in mortgage rates and slightly more inventory,” said Lisa Sturtevant, Chief Economist at Bright MLS. “These small improvements gave buyers who were waiting on the sidelines a chance to re-enter the market.”

However, she cautioned that October’s rebound doesn’t erase the year-over-year decline. “Activity was still lower compared to last October, even though mortgage rates were around the same level,” Sturtevant noted.

Her analysis highlights major regional differences:

• Stronger year-over-year gains in the Midwest and South
• Weaker buyer activity in the Northeast and especially the West

The Midwest’s relative affordability and the South’s larger housing supply appear to be giving both regions an advantage.

Market Outlook: Slow but Steady Through Year-End

While falling mortgage rates gave buyers some breathing room earlier in the fall, borrowing costs began climbing again in November. Combined with the lack of fresh labor market data and early signs of weaker consumer spending, economists expect a quiet end to the year for housing.

“The fundamentals of the housing market remain solid, but affordability challenges are not going away anytime soon,” Sturtevant said. “Lower rates will help bring more buyers into the market next year, but it will take time before households feel real relief.”

With 2025 nearing its close, the housing market remains sensitive to shifts in mortgage rates and economic clarity. October’s uptick in pending sales shows that demand is there but buyers are still waiting for the right moment to make their move. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.