Last month, pending home sales experienced an unexpected increase, however, home rates are now significantly higher.

• Since March, pending sales have been at their highest level and are 2.6% higher than September of the previous year.
• The rate on a 30-year fixed mortgage was steadily decreasing in August and reached its lowest point of 6.11% on September 11.
• In the Northeast and West, there was an increase in regionally pending sales year over year, while in the Midwest and South, there was no change.

The National Association of Realtors reported that signed contracts to purchase existing homes increased by 7.4% in September compared to August, exceeding analysts' expectations of a 1% increase.

Since March, the highest level of "pending" sales has been achieved, which is 2.6% higher than September of the previous year.

The most current indicator of buyer demand is based on pending sales, which are dependent on signed contracts and reflect the behavior of people out shopping during the month. Additionally, this data reveals the sensitivity of today's buyers to changes in mortgage rates.

The average rate on a 30-year fixed mortgage decreased throughout August and reached its lowest point of 6.11% on September 11, according to Mortgage News Daily. The rate remained at that level for the rest of the month before increasing to just over 7% in October.

"The number of contract signings increased nationwide during the late summer due to the confluence of lower mortgage rates and increased inventory options, according to Lawrence Yun, the chief economist for the Realtors, in a statement. It is predicted that there will be further advancements if the economy continues to generate employment opportunities, inventory levels expand, and mortgage rates remain stable."

In the Northeast and West, regionally pending sales increased year over year, while they remained flat in the Midwest and South. The largest gains were observed in the West, where home prices are highest, and a small drop in rates would benefit buyers the most.

Although mortgage rates have increased, homebuyers' demand for mortgages increased by 10% last week compared to the same week a year ago, according to the Mortgage Bankers Association. Despite this, historically low levels of mortgage demand and higher sales still persist.

CoreLogic's chief economist, Selma Hepp, stated that the rebound in pending activity, driven by rising rates to 7%, is likely to be short-lived and insufficient to help 2024 home sales surpass 2023 levels.