Home Contract Signings Rise for Third Month as Buyers Overcome Higher Rates
Home contract activity increased for the third straight month in October as buyers responded to growing inventory and higher mortgage rates. Learn more about the housing market trends.
Home contract signings continued their upward trend in October, marking the third month of consecutive gains as buyers took advantage of increased housing inventory despite higher mortgage rates. The Pending Home Sales index, which tracks signed contracts for existing single-family homes, condos, and co-ops, rose by 2% to 77.4 from the previous month. For context, an index reading of 100 represents the level of activity seen in 2001.
All regions in the U.S. experienced growth, with the Northeast leading the way with a 4.7% increase month-over-month. The Midwest followed with a 4% rise, while the South and West saw smaller improvements.
Lawrence Yun, the chief economist for the National Association of Realtors, shared his perspective: “We’re seeing homebuying momentum build after nearly two years of limited sales. Even with mortgage rates showing a modest increase, ongoing job growth and an increase in housing supply are bringing more buyers to the market.”
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Compared to October of the previous year, contract activity has increased by 5.4% nationwide, signaling a positive shift in the housing sector.
Signs of an Active Housing Market
There are more indicators suggesting that the housing market is picking up pace as the year comes to a close. According to the Mortgage Bankers Association, mortgage applications for home purchases surged by 12% in the week ending Friday, reflecting growing interest among potential buyers.
New Homes vs. Existing Homes
The rise in contract activity for existing homes contrasts with new home sales, which experienced a decline last month. One factor that may have contributed to this downturn is the impact of Hurricane Helene, which caused severe flooding along Florida's west coast, western North Carolina, eastern Tennessee, and southwest Virginia in late September. Hurricane Milton, which hit west central Florida in early October, likely added to the disruption in the new home market.
These developments suggest that while the housing market is experiencing a recovery in existing home sales, challenges in the new home sector may persist due to environmental impacts and other factors.
Also Read: Why Owning a Home is More Expensive Than Renting in United States
