Pending home sales across the United States showed no change in September compared to the previous month, according to a recent report. This flat performance comes despite a slight year-over-year decline of 0.9% in contract signings. Regional markets displayed varied results, with increases in the Northeast and South balancing out decreases in the Midwest and West.
Key Takeaways
- National pending home sales held steady month-over-month in September.
- Year-over-year, pending sales saw a modest 0.9% decrease.
- The Northeast and South regions experienced increases in contract signings.
- The Midwest and West regions reported declines in pending home sales.
- Mortgage rates reaching a one-year low did not fully boost market activity.
National Trends in Contract Signings
September's pending home sales data indicates a stable but not robust market. The National Association of REALTORS® (NAR) Pending Home Sales Report revealed that while monthly activity remained unchanged, the market has not yet reached a level considered healthy. This stasis occurred even as mortgage rates dropped to a one-year low, a factor typically expected to stimulate buyer interest.
Lawrence Yun, NAR Chief Economist, noted that contract signings matched the second-strongest pace of the year. However, he emphasized that this pace is still insufficient for a truly healthy market. Despite a record-high stock market and increasing housing wealth in September, a likely softening job market may have offset these positive factors.
September 2025 National Pending Home Sales
- Month over month: No change
- Year over year: 0.9% decline
Regional Market Performance Varies
The national flatline in pending home sales masks significant regional differences. Two major regions, the Northeast and the South, saw an increase in contract signings. Conversely, the Midwest and West experienced declines, illustrating a fragmented housing market across the country.
Northeast and South See Gains
The Northeast region recorded a 3.1% increase in pending home sales from the previous month, along with a 0.5% increase year over year. The South also showed positive momentum, with a 1.1% month-over-month increase and a 0.9% rise compared to the previous year. These gains suggest stronger buyer confidence or more favorable local conditions in these areas.
Midwest and West Face Declines
In contrast, the Midwest saw a 3.4% decrease in pending sales month over month and a 1.5% decline annually. The West experienced a slight 0.2% monthly drop, but a more significant 5.3% decrease year over year. These regional downturns could be attributed to various local factors, including affordability challenges or slower economic growth.
September 2025 Regional Pending Home Sales
- Northeast: +3.1% month over month; +0.5% year over year
- Midwest: -3.4% month over month; -1.5% year over year
- South: +1.1% month over month; +0.9% year over year
- West: -0.2% month over month; -5.3% year over year
Buyer and Seller Confidence Indicators
The REALTORS® Confidence Index survey provides insights into market sentiment. In September, 20% of NAR members anticipated an increase in buyer traffic over the next three months. This figure represents a slight uptick from 19% in the previous month, though it is slightly down from 21% a year ago.
Seller traffic expectations remained unchanged, with 19% of members expecting an increase. This figure is consistent with the previous month but slightly lower than 20% from September 2024. The data suggests that while buyer interest shows a marginal improvement, sellers are not entering the market at a significantly higher rate.
"Contract signings matched the second-strongest pace of the year. However, signings have yet to fully reach the level needed for a healthy market despite mortgage rates reaching a one-year low," said NAR Chief Economist Lawrence Yun.
Inventory and Affordability Outlook
Inventory levels have become a notable factor in the current housing market. Inventory has now climbed to a five-year high, providing home buyers with more options and potentially more room for price negotiation. This increase in available homes could be a positive sign for buyers seeking better deals.
What is the Pending Home Sales Index?
The Pending Home Sales Index (PHSI) is a forward-looking indicator for the housing sector. It tracks home-contract signings, which typically finalize within one or two months. An index of 100 represents the average level of contract activity in 2001, considered a benchmark for a normal market.
Looking ahead, mortgage rates are trending toward three-year lows. This trend should further improve affordability for potential buyers. However, external factors like a potential government shutdown could temporarily slow down home sales activity, introducing an element of uncertainty into the market.
The current environment presents a mixed picture. While affordability is improving due to lower mortgage rates and higher inventory, other economic pressures might temper overall market growth. Buyers have more choices and negotiation power, but the market as a whole is still striving for full health.
Understanding the Data
The Pending Home Sales Index is a crucial tool for understanding future housing trends. It measures signed contracts, which are early indicators of future closed sales. The time between a pending contract and a closed sale can vary, influenced by factors such as mortgage financing, home inspections, or appraisal issues.
The index is based on a sample covering about 40% of multiple listing service data each month. Historical data shows that monthly sales-contract activity generally parallels closed existing-home sales in the subsequent two months. This makes the PHSI a reliable predictor of upcoming market performance.
The housing market continues to navigate complex economic currents. While some indicators point to improving conditions for buyers, the overall pace of sales activity remains moderate. Observers will closely monitor mortgage rates, inventory levels, and broader economic stability in the coming months.
