More buyers signed contracts on existing single-family houses and condos in October — positive news for a housing market still moving slowly toward recovery.
Pending sales rose 1.9% from the previous month, the National Association of Realtors reported Tuesday. The news comes a few days after the trade group reported that existing-home transactions were up by a similar amount in October. Pending sales are an indicator of what existing sales may look like one to two months from now when buyers close on their purchases.
“The October pending home figures indicate a more balanced housing market,” Homes.com chief residential economist Brad Case said. “Potential buyers have a chance to make more favorable deals thanks to an increase in the inventory of homes available for purchase, combined with both a slight easing in mortgage interest rates since late May and the normal seasonal easing of house prices from their peak in June.”
The inventory of homes for sale in October was 1.52 million, down slightly from the previous month. There’s currently a 4.4-month supply of houses available, down from 4.5 months in September. The supply is up 11% from one year ago. Meanwhile, mortgage rates have dipped toward 6%, though their downward movement slowed in recent weeks.
Contracts to sell homes fell 0.4% in October from the same month in 2024.
Three of the four major U.S. regions enjoyed an increase in contracts signed in October, including the Midwest, Northeast and South. The Midwest led the way with a 5.3% rise, followed by the Northeast at 2.3% and the South at 1.4%. Contracts fell in the West by 1.5%.
“The Midwest has been the standard-bearer thanks to its lower home prices, while continued high prices in the West continue to discourage potential buyers there,” Case said.
Since October 2024, sales have risen 2% in the South and 0.9% in the Midwest, but they’ve dropped 1% in the Northeast and 7% in the West.
Buyers will have even more negotiating power in the next few months as the number of days houses sit on the market lengthens, Lawrence Yun, NAR chief economist, said in a statement. The median days on market climbed to 34 in October from 33 the previous month and 29 days a year ago.
Yun said another reason to be cheerful entering the holiday season is the somewhat positive jobs report for September, even if the data was late in coming due to the federal government shutdown. Though the unemployment rate rose, the economy generated 119,000 new positions.
“Job gains in September, following the data blackout, are reassuring and suggest the economy is not slipping into a recession,” he said. “This may boost confidence in future homebuying.”