Pending home sales remain stable as affordability issues persist

In addition to home sales remaining flat month over month, pending home sales fell 0.9% year over year in September.

Despite these results, about 20% of NAR members surveyed expect to see an increase in buyer or seller traffic over the next three months, according to the Realtors’ Confidence Index.

While some real estate agents may expect a more active housing market in the coming months, economists warn that affordability remains a challenge for many consumers.

“Lower rates have brought some buyers into the market, but according to data from the Association of Mortgage Bankers“The recent rate cut has mainly increased refinancing activity rather than purchasing activity,” said Lisa Sturtevant, chief economist at Clear MLSsaid a statement.

“Affordability is still a constraint, even as interest rates have fallen to their lowest levels in a year. And consumers are generally feeling more cautious amid growing economic uncertainty.”

Sam Williamson, First American‘S Senior economist added that he expects much of this year’s sales activity to be driven by ‘life happening’ moments, especially as affordability challenges and structural inventory shortages continue to weigh on demand.

“Lower rates help, but are not a silver bullet,” Williamson said in a statement.

Regionally, pending home sales rose month-on-month in the Northeast (65.7) and the South (90.0), where increases of 3.1% and 1.1% were recorded respectively.

In contrast, pending home sales fell month-over-month in the Midwest (-3.4% to a reading of 73.8) and the West (-0.2% to 59.2). Annually, pending home sales increased in the Northeast (0.5%) and the South (0.9%), but declined in the Midwest (-1.5%) and the West (-5.3%).

“The South led the way, posting gains both month-over-month and year-over-year. Its relative affordability – especially when combined with lower mortgage rates – continues to support buyer activity by making the payment-to-payroll equation more manageable,” Williamson said.

“The Northeast saw a modest recovery from August but remains essentially flat compared to last year, while the Midwest regained some of its strength in August, with declines on both a monthly and annual basis. Meanwhile, the West continues to lag and remains the weakest region for signings.”