Pending home sales rose 2.0% in October, the third straight month of gains

WASHINGTON (November 27, 2024) – Pending home sales rose in October – the third straight month of gains – according to the National Association of REALTORS®. All four major US regions saw month-over-month gains in transactions, with the Northeast leading the way. Year-over-year, contract signings increased in all four US regions, led by the West.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – rose 2.0% to 77.4 in October. Year-over-year, outstanding transactions increased by 5.4%. An index of 100 equals the level of contracting activity in 2001.

“There is momentum for home buying after nearly two years of depressed home sales.” said NAR Chief Economist Lawrence Yun. “Even with mortgage rates rising modestly despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.”

SentriLock lockbox openings were up 7% in October compared to last year.

Pending home sale Regional division

The Northeast PHSI jumped 4.7% from last month to 68.7, up 7.2% from October 2023. The Midwest index grew 4.0% to 77.8 in October, up 1.8% year-over-year before.

The Southern PHSI rose 0.9% to 90.0 in October, up 2.5% from a year ago. The West index rose 0.2% from the previous month to 64.1, up 16.8% from October 2023.

“It is encouraging to see contract signings increasing in all major regions of the country,” Yun added. “More notable gains from a year ago occurred in the expensive regions of the Northeast and West. The record high stock market is providing a boost to home buyers at the top end.”

About the National Association of REALTORS®

The National Association of REALTORS® is America’s largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industry. The term REALTOR® is a registered collective membership mark that identifies a real estate agent who is a member of the National Association of REALTORS® and subscribes to its strict code of ethics. For free consumer guides on navigating the home buying and selling transaction processes – from written buyer agreements to negotiating compensation – visit facts.realtor.

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*The pending home sales index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not been completed, although the sale is usually completed within one or two months of signing.

Pending contracts are good early indicators of upcoming sales closings. However, the time period between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as the buyer’s difficulty obtaining mortgage financing, home inspection issues, or appraisal issues.

The index is based on a sample covering about 40% of multiple list service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales contract activity parallels the level of closed existing home sales in the following two months.

An index of 100 corresponds to the average level of contracting activity in 2001, which was the first year studied. Coincidentally, the volume of existing home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current US population.

NOTE: Existing home sales for November will be reported on December 19th. The next pending home sales index will be released on December 30. All release times are at 10 a.m. Eastern. See NAR Statistical News Release Schedule.