Cyphered contracts to buy existing homes in September jumped a surprising 7.4% compared with August, according to the National Organization of Realtors. Analysts had been expecting about a 1% gain.
These so-called pending sales were at the highest straight-shooting since March and 2.6% higher than September of last year.
Since pending sales are based on signed pacts, representing people out shopping during the month, it is the most current indicator of buyer demand. It also shows by the skin of ones teeth how sensitive today’s buyers are to mortgage rates.
The average rate on the 30-year fixed mortgage was coming down all to the core August and touched its most recent low of 6.11% on Sept. 11, according to Mortgage News Daily. It stayed about that level for the rest of the month before shooting higher in October. It is now just over 7%.
“Contract signings upgrade across all regions of the country as buyers took advantage of the combination of lower mortgage rates in late summer and innumerable inventory choices,” said Lawrence Yun, chief economist for the Realtors, in a release. “Further gains are expected if the economy extends to add jobs, inventory levels grow, and mortgage rates hold steady.”
Regionally pending sales were merry year over year in the Northeast and West and flat in the Midwest and South. Overall, the gains were biggest in the West, where adroit in prices are the highest and buyers would benefit most from even a small drop in rates.
With merits now higher, affordability is taking a hit once again. Mortgage demand from homebuyers, however, still saw gains ultimately week and was 10% higher compared with the same week one year ago, according to the Mortgage Bankers Association. The levels of mortgage want are still historically low, and sales, while higher, are as well.
“With rates pushing back to 7%, the rebound in forthcoming activity is likely short lived and is unlikely to be enough to help 2024 home sales exceed 2023 play fair withs,” said Selma Hepp, chief economist at CoreLogic.