Financial News: U.S. Pending Home Sales Unexpectedly Increase In October

U.S. Pending Home Sales Unexpectedly Increase In October

(RTTNews) - The National Association of Realtors released a report on Wednesday unexpectedly showing a continued increase by U.S. pending home sales in the month of October.

NAR said its pending home sales index jumped by 2.0 percent to 77.4 in October after soaring by 7.5 percent to an upwardly revised 75.9 in September.

Economists had expected pending home sales to pull back by 1.3 percent compared to the 7.4 percent spike originally reported for the previous month.

The pending home sales index increased for the third consecutive month, reaching its highest level since hitting 78.3 in March.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

"Homebuying momentum is building after nearly two years of suppressed home sales." said NAR Chief Economist Lawrence Yun.

He added, "Even with mortgage rates modestly rising 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."

The report showed significant increases by pending home sales in the Northeast and West, which jumped by 4.7 percent and 4.0 percent, respectively.

Pending home sales in the South also climbed by 0.9 percent, while pending home sales in West edged up by 0.2 percent, NAR said.

"It's encouraging to see contract signings increasing in all major regions of the country," said Yun. "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 for upper-end home buyers."

A separate report released by the Commerce Department on Tuesday showed a substantial pullback by new home sales in the U.S. in the month of October.

The Commerce Department said new home sales saw a 17.3 percent nosedive to an annual rate of 610,000 in October after spiking by 7.0 percent to a rate of 738,000 in September. Economists had expected new home sales to decrease by 1.1 percent to a rate of 730,000.

New home sales pulled back well off their highest level in over a year, plunging to their lowest level since hitting an annual rate of 596,000 in November 2023.

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