A forward-looking gauge of U.S. home purchases rebounded in October to a 10-month high, signaling steady housing demand despite growing affordability concerns among many prospective buyers.
The National Association of Realtors’ index of pending
Low mortgage rates and solid job growth have supported housing demand this year as pandemic-weary buyers seek more spacious accommodations. Existing home sales are on track to exceed 6 million in 2021, which would be the strongest in 15 years, Lawrence Yun, NAR’s chief economist, said.
Still, competition over a scant number of listings — particularly on the lower, more affordable end of the resale market — has pushed prices out of reach for
“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” Yun said in a statement. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.”
Contract signings increased across all four regions, led by an 11.8% gain in the Midwest and a 8% rise in the South.
Compared with a year earlier, contract signings were down 4.7% on an unadjusted basis.
Pending home sales are often looked to as a leading indicator of existing-home purchases given properties typically go under contract a month or two before they’re sold.
