Following four consecutive months of gains, pending home sales receded in September, but it isn't any indication of a pullback in demand from home buyers.
The National Association of REALTORS® reported Thursday that pending home sales—a forward-looking indicator based on contract signings—dipped 2.2% in September month over month. But contract signings are still up 20.5% compared to a year ago, which shows the fall housing market continues to be unseasonably hot this year amid the pandemic.
All four major regions of the U.S. posted double-digit year-over-year gains in pending home sales activity, led by the Northeast with a 27.7% annual increase.
“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” says Lawrence Yun, NAR’s chief economist. “With persistent low mortgage rates and some degree of continuing jobs recovery, more contract signings are expected in the near future.”
Yun predicts a second wave of home sales on the horizon as homeowners who had not considered moving prior to the pandemic begin to enter the market. “A number of these owners are contemplating moving into larger homes in less densely populated areas in light of newfound work-from-home flexibility,” he says.
Realtor.com®’s Housing Market Recovery Index shows that the metro areas that have recovered to their pre-pandemic levels or even above (as of Oct. 10) are Seattle-Tacoma-Bellevue, Wash.; Boston-Cambridge-Newton, Mass.-N.H.; Los Angeles-Long Beach-Anaheim, Calif.; Las Vegas-Henderson-Paradise, Nev.; and San Jose-Sunnyvale-Santa Clara, Calif.
NAR’s Pending Home Sales Index showed the following year-over-year gains in September broken down by region: