Pending home sales posted their first monthly increase since May, but the small improvement did little to change the picture of a housing market still struggling with elevated mortgage rates.
Why it matters: Pending home sales increased 0.3% in August, according to the National Association of Realtors, after declining in both June and July. The gain was better than economists’ expectations for a 0.6% decline, but contract signings remained 4.7% below where they were a year ago.
- The regional numbers were mixed. Pending sales rose 3.0% in the West and 2.3% in the South, while falling 4.2% in the Northeast and 1.6% in the Midwest.
- Compared with a year ago, every region remained negative: the West fell 6.7%, Midwest 4.9%, Northeast 3.9% and South 3.8%.
What They’re Saying: “Buyers steadily entered into contracts in August even though mortgage rates increased,” NAR Chief Economist Lawrence Yun said. But Yun cautioned that the housing market remains sluggish, with higher mortgage rates offsetting some of the additional purchasing power created by job and income growth.
- The longer-term picture remains particularly weak. Yun noted that contract signings are running roughly 30% below their pre-pandemic pace. Pending sales are closely watched because signed contracts typically turn into completed existing-home sales within one or two months.
The bottom line: August finally broke the housing market’s monthly losing streak, but a 0.3% increase isn’t much of a rebound. With pending sales still down 4.7% from last year and mortgage rates remaining elevated, housing demand continues to struggle.