Pending Home Sales Surge 4% in August as Mortgage Rates Hit Yearly Low — Evening Brief – 09.29.25  

U.S. pending home sales climbed 4.0% in August to 74.7, marking the largest monthly gain since March and far exceeding expectations for a modest 0.2% rise, according to the National Association of Realtors (NAR). July’s reading was revised slightly to a 0.3% decline. On a year-over-year basis, contract signings rose 3.8%, with increases recorded in every U.S. region. 

“Lower mortgage rates are enabling more homebuyers to go under contract,” said Lawrence Yun, NAR chief economist. The Midwest led the surge, with sales jumping nearly 9%, the strongest gain since early 2023. Contract activity also picked up in the South and West, signaling renewed momentum in markets where affordability pressures had weighed heavily on demand. 

The rebound comes as the average 30-year fixed mortgage rate dropped to 6.34%, its lowest in a year. The rate decline has encouraged buyers who had been sidelined by affordability concerns to re-enter the market, while also prompting more homeowners to list their properties for sale. 

Still, supply dynamics remain a constraint. While the number of existing homes for sale is hovering near five-year highs, reflecting more sellers entering the market, inventories remain well below pre-pandemic levels. This scarcity has kept home prices elevated, with limited downward pressure despite the recent increase in supply. 

NAR noted that pending home sales are a leading indicator of existing-home sales, as most transactions typically close one to two months after contract signing. The August data suggests a stronger pipeline for home sales heading into the fall, though affordability challenges and lingering rate sensitivity may continue to shape the housing market’s trajectory.