Skip to main content

Pending Home Sales Rise In October After September Dip

Nov 29, 2021
Pending Home Sales

NAR says month-over-month contract activity rose in all four U.S. Regions

Pending home sales increased in October, rebounding after a decline in September, according to the National Association of Realtors.

Contract activity rose month-over-month in each of the four major U.S. regions. On a year-over-year basis, however, transactions were split, as two regions reported drops and two others posted gains.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 7.5% to 125.2 in October. Year-over-year, signings fell 1.4%. An index of 100 is equal to the level of contract activity in 2001.

"Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later," said Lawrence Yun, NAR's chief economist. "This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.

"The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years."

While the market is expected to remain robust, Yun forecasts home prices will rise at a gentler pace over the course of the next several months and expects demand to be milder as mortgage rates increase.

Realtor.com's Hottest Housing Markets data revealed that of the largest 40 metros, the most improved metros over the past year as of Nov. 18 were Orlando-Kissimmee-Sanford, Fla.; Jacksonville, Fla.; Tampa-St. Petersburg-Clearwater, Fla.; Dallas-Fort Worth-Arlington, Texas, and Nashville-Davidson, Tenn.

Compared to the previous month, contract signings rose at the strongest pace in the Midwest and South regions. Month-over-month, the Northeast PHSI increased 6.9% to 99.5 in October, a 10% drop from a year ago. In the Midwest, the index climbed 11.8% to 124.6 last month, up 5.1% from October 2020.

Pending home sales transactions in the South rose 8% to an index of 149.7 in October, up 0.6% from October 2020. The index in the West grew 2.1% in October to 107.5, down 6.2% from a year prior.

First American Deputy Chief Economist Odeta Kushi said that, overall, the housing market continues to favor sellers over buyers.

“Even as rates increased in October, the housing market remained a competitive sellers’ market,” she said. “Demand remains high against a very limited number of homes for sale. A high velocity of sales, as indicated by lower days on market, explains a housing market characterized by higher sales and lower inventory.”

The National Association of Realtors is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

About the author
David Krechevsky was an editor at NMP.
Published
Nov 29, 2021
High Rates Dampen Builder Confidence

Builder confidence in the market for newly built single-family homes was 43 in June, down two points from May.

Jun 20, 2024
Mortgage Rates Fell For The Third Straight Week

The 30-year fixed-rate mortgage averaged 6.87%.

Jun 20, 2024
Housing Starts Hindered By Barriers To New Construction

Single-family building permits drop to lowest level in a year

Jun 20, 2024
Lack Of Financial Knowledge Leads Borrowers To Overpay

The Philadelphia Fed's study finds limited borrower sophistication may provide lenders with market power.

Jun 20, 2024
Home Price Appreciation 'Normalizing' Nationwide

First American Data & Analytics reports May home price index 5.9% higher YOY

Jun 20, 2024
Home Flipping Activity, Profits Rise During Q1 2024

The flipping rate rose for the second straight quarter while investment returns reached 30% nationwide.

Jun 20, 2024