Largest gains in over four years recorded
Pending home sales across the US rebounded in September, spiking by 7.4% monthly and recording their strongest uptick since June 2020 as higher supply and more affordable mortgage rates helped boost homebuying sentiment.
The National Association of Realtors (NAR) said Wednesday that pending sales were up across all regions of the country, posting their biggest growth in the West (rising 9.8%) and jumping by 7.1% in the Midwest, 6.7% in the South, and 6.5% in the Northeast.
While falling mortgage rates over the summer helped boost that stronger pace of activity, NAR’s index remains historically low – and rates have ticked upwards slightly since September thanks in part to higher-than-expected inflation readings and employment figures.
Still, NAR’s chief economist Lawrence Yun said further gains would probably arrive if jobs growth continues, inventory levels rise and mortgage rates remain steady.
Pending home sales in September bounced 7.4% to the highest level since March. https://t.co/Tl0eA7zFAO
— National Association of REALTORS® (@nardotrealtor) October 30, 2024
The association expects existing-home sales to increase to 4.47 million next year before hitting the 5-million mark in 2026, Yun said, while home prices are anticipated to grow more slowly than at present because more supply will probably hit the market.
Odeta Kushi, First American’s deputy chief economist, noted that purchase applications have moved lower in October thanks mainly to that resurgence in mortgage rates, highlighting the interest rate sensitivity of buyers and sellers.
But she anticipated a gradual decline in mortgage rates down the line, “which should bring more buyers and sellers off the sidelines.” That outlook is heavily dependent on coming labor market and inflation data, she said, “along with any signals from the Fed about future rate cuts.
“If upcoming data suggests weaker-than-expected labor market conditions or an economic slowdown, we could see some downward pressure on the 10-year Treasury yield and mortgage rates.”
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