Pending Home Sales Rise in August as Lower Mortgage Rates Boost Buyer Demand

The housing market showed signs of renewed momentum in August, as pending home sales increased for the second month in a row. According to the National Association of Realtors (NAR), the number of signed contracts to purchase homes rose 4% month-over-month, pushing pending home sales 3.8% higher than a year ago.

Regional Breakdown of Pending Home Sales

The gains were broad-based, with all major regions of the country reporting stronger contract signings compared to last year:

• Midwest: Pending sales jumped nearly 9%, leading all regions.

• West: Contract signings climbed 5%, driven by improved affordability and moderating home prices.

• South & Northeast: Both regions posted modest annual increases, reflecting improving buyer confidence.

Mortgage Rates Driving Buyer Activity

Lawrence Yun, NAR’s chief economist, pointed to lower mortgage rates as a key factor in the housing market’s rebound.

“Lower mortgage rates are enabling more home buyers to go under contract,” Yun said. “In the Midwest, low mortgage rates combined with high levels of affordability are attracting more buyers compared to other regions.”

With mortgage rates easing from their recent highs, affordability conditions are beginning to improve—giving both first-time buyers and move-up buyers an opportunity to re-enter the market.

Buyer Traffic Expected to Rise

In addition to stronger pending sales, a recent NAR survey of realtors revealed that more agents are reporting increased buyer traffic. This suggests momentum could carry into the fall, especially if mortgage rates continue to moderate and housing inventory remains on the upswing.

What This Means for Home Buyers and Sellers

For home buyers, today’s environment offers a unique window of opportunity before competition intensifies. Declining rates and growing inventory make it easier to find and lock in a home at more favorable financing terms.

For home sellers, the increase in buyer demand means more showings and stronger offers, especially in affordable and mid-price ranges.

✅ Bottom line: Pending home sales are rising as mortgage rates decline, affordability improves, and buyer traffic gains momentum. The Midwest and West are leading the charge, but all regions are seeing growth—signaling a more active housing market ahead.