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3w ago

U.S. Pending Home Sales Rebound 4% in August as Lower Rates Lure Buyers

Lower mortgage costs after the Fed's rate cut drew more buyers into contracts.

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A "now hiring" sign is displayed outside Taylor Party and Equipment Rentals in Somerville, Massachusetts, U.S., September 1, 2022. REUTERS/Brian Snyder
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Overview

  • Contract signings rose 4.0% from July to an index level of 74.7, up 3.8% from a year earlier, the highest reading in five months, according to NAR.
  • Thirty-year mortgage rates hovered near an 11-month low around 6.3% after a 25-basis-point Fed cut, a shift NAR’s Lawrence Yun said helped bring buyers back.
  • Monthly gains were strongest in the Midwest (+8.7%), with increases in the West (+5.0%) and South (+3.1%) and a decline in the Northeast (−1.1%).
  • Mortgage purchase applications are up about 18% year over year, pointing to potential momentum in sales over the coming months.
  • Inventory constraints and lock-in effects—over 80% of mortgages carry rates below 6%—along with a softer labor market threaten to cap further improvement.