According to the latest National Association of Realtors (NAR) Pending Home Sales Report, sales under contract in September 2025 showed no change from August’s totals, but fell 0.9% year-over-year. Regionally, month-over-month and year-over-year pending home sales rose in the Northeast and South, but declined in the Midwest and West.
NAR found that 20% of its members expect an increase in buyer traffic over the next three months, up slightly from 19% last month, and down slightly from 21% one year ago. Meanwhile, 19% of NAR members expect an increase in seller traffic, unchanged from last month, and down slightly from 20% recorded in September 2024.
"Contract signings matched the second-strongest pace of the year. However, signings have yet to fully reach the level needed for a healthy market despite mortgage rates reaching a one-year low," said NAR Chief Economist Lawrence Yun. "A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market."
First American Senior Economist Sam Williamson added: “While September’s pending home sales headline number appears flat relative to August, the underlying data tells a more nuanced story. As a forward-looking indicator based on contract signings, the data suggests that lower mortgage rates, improved affordability, and higher inventory are pulling more buyers back into the market, with signings matching their second-strongest pace of the year. Still, many buyers remain cautious, despite mortgage rates hitting a one-year low.”
Freddie Mac’s latest Primary Mortgage Market Survey (PMMS) shows that the 30-year fixed-rate mortgage (FRM) averaged 6.17% as of October 30, 2025, down from last week when it averaged 6.19%. A year ago at this time, the 30-year FRM averaged 6.72%. This week marked the fourth consecutive week that mortgage rates have dropped.
"Inventory has climbed to a five-year high, giving home buyers more options and room for price negotiation," Yun added. "Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity."
And after Wednesday’s Federal Open Market Committee (FOMC) meeting, the Federal Reserve responded to continued economic uncertainty and high levels of inflation by lowering the target range for the federal funds rate by 0.25 percentage points to 3.75%-4%. This move may push mortgage rates even lower and closer to the 6%-mark before the close of 2025.
“The purchase mortgage application data from October indicates additional momentum, with buyers responding to lower rates. While they’re below September’s strong pace, this suggests that the modest improvement in pending sales may continue into the fall, especially if affordability conditions stabilize,” noted Williamson. “Ultimately, we believe sales activity this year will be primarily driven by ‘life happens’ moments — job changes, marriages, births, and other personal milestones — while affordability challenges and structural inventory shortages continue to weigh on demand. Lower rates help, but they’re not a cure-all.”
Regionally, pending home sales were split month-over-month in the four major regions, as in the Northeast, pending home sales increased 3.1% month-over-month, a 0.5% increase year-over-year. Also experiencing an increase was the Southern region, reporting a 1.1% increase month-over month, and a 0.9% increase year-over-year.
It was a different story in the Midwest and West, where pending home sales slid in September. In the Midwest, a 3.4% decrease was reported month-over-month, a 1.5% decrease year-over-year. In the West, pending home sales nearly flatlined, reporting just a 0.2% decrease month-over-month, but a more expansive 5.3% decrease year-over-year.
“The South led the way, posting both month-over-month and year-over-year gains. Its relative affordability — especially when paired with lower mortgage rates — continues to support buyer activity by making the payment-to-paycheck equation more manageable,” said Williamson. “The Northeast saw a modest rebound from August, but remains essentially flat compared to last year, while the Midwest gave back some of its August strength, with declines on both a monthly and annual basis. Meanwhile, the West continues to lag, remaining the softest region for signings.”
The percent of change in pending home sales is based on NAR’s Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on home-contract signings. An index of 100 is equal to the level of contract activity in 2001.
