The latest home sales numbers appear subdued, but a closer look shows signs of progress and growing confidence among home buyers. The National Association of REALTORS®' Pending Home Sales Index–a forward-looking indicator based on contract signings–showed no change in September compared to August and down just 0.9% annually, but that translates to holding steady and matching the second-strongest pace of the year, Lawrence Yun, NAR's chief economist, says.
Economists aren't shrugging off that progress. The latest housing report, released Wednesday, follows NAR's existing-home sales data showing a 4.1% annual increase in September. Contract signings last month saw the largest monthly gains in the Northeast (up 3.1%) and South (up 1.1%), signaling possible sales boosts ahead in those regions.
Still, Yun cautions that contract signings "have yet to fully reach the level needed for a healthy market," even as mortgage rates hit a one-year low. "A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market," he says.
Home buyers do appear to be gradually re-emerging, however. Mortgage applications for home purchases-a gauge of future buying activity-have posted consistent double-digit annual gains, rising 20% higher than a year ago in mid-October, according to Mortgage Bankers Association data. In addition, first-time buyers made up 30% of existing-home sales in September, up from 26% a year earlier, NAR reports.
So, What Are Buyers Waiting For?
A newly released CNBC Housing Market Survey shows that 72% of real estate agents say their clients expect mortgage rates to fall further-which may be prompting some to hold off. But Matt Schulz, chief consumer finance analyst at LendingTree, says those who've been sitting on the sidelines should talk to a lender to see if recent market drops could already translate into real savings.
Freddie Mac reported the 30-year fixed-rate mortgage averaged 6.19% last week, its lowest level in more than a year. That's a significant shift from rates above 7% at the start of 2025. A recent LendingTree analysis found that rate reductions from January to July saved buyers an average of $40,000 over the life of a 30-year loan or lowered the average monthly mortgage payment by about $112. With further rate declines since then, savings could be even greater.
Lower mortgage rates also may help home buyers offset still-rising home prices, which are up about 2% annually-a slower pace than in recent years but still higher in most markets. For home shoppers reemerging, they may find more bargaining power than they've had in years.
"Inventory has climbed to a five-year high, giving home buyers more options and room for price negotiation," Yun says. "Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity."
