Housing contract activity rises for the third month in a row as consumers retreat from higher prices

On By Littum

Home contract signings rose for a third straight month in October as homebuyers took advantage of growing inventory levels and shrugged off higher mortgage rates.

The pending home sales index, which measures signed real estate contracts for existing single-family homes, condominiums and condominiums, rose 2% to 77.4 from a month earlier. An index of 100 equals the level of contracting activity in 2001.

Activity increased in all parts of the country, led by the North East, which saw a 4.7% increase month-on-month. Contract signings in the Midwest increased 4%, while gains in the South and West were smaller.

“Momentum for home buying is building after nearly two years of subdued home sales,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement. “Even with mortgage rates rising modestly … continuous job additions and more housing inventory are bringing more consumers into the market.”

Compared to a year earlier, contract activity increased 5.4% nationwide.

There are other signs that the housing market is growing towards the end of the year. Applications for mortgages to buy a home rose 12% through Friday compared with a week earlier, according to the Mortgage Bankers Association.

The increase in contract activity for existing homes contrasted with sales of new homes, which fell last month, according to data released Tuesday.

Some of this sales decline can likely be explained by Hurricane Helene, which caused devastating flooding along Florida’s west coast and in western North Carolina, eastern Tennessee, and southwestern Virginia in late September, and Hurricane Milton, which made landfall in west-central Florida less than two weeks later.

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.

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