(Kitco News) - Hopes for a stabilizing U.S. housing market got a boost after the number of potential home buyers improved beyond expectations last month, according to the latest data from the National Association of Realtors (NAR).
The U.S. pending home sales index rose 2.0% in October, the NAR announced on Wednesday, after September’s 7.5% increase. The data was significantly better than forecasts, as economists expected a 2.0% decline. All four regions posted monthly gains in transactions, with the Northeast leading the way.
For the year, pending home sales rose 5.4% against expectations for a 3.9% increase, and following a 2.6% rise in September. All four regions also posted gains year-over-year, with the West registering the highest annual growth.
“Homebuying momentum is building after nearly two years of suppressed home sales,” said NAR Chief Economist Lawrence Yun. “Even with mortgage rates modestly rising despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.”
Spot gold fell sharply in the minutes following the housing data, which was released at the same time as U.S. core PCE for October. It last traded at $2,640.80 per ounce for a gain of 0.30% on the day.
“It's encouraging to see contract signings increasing in all major regions of the country,” Yun added. “More notable gains from a year ago occurred in the expensive regions of the Northeast and West. The record-high stock market is providing a boost for upper-end home buyers.”
Economists pay close attention to pending home sales because the report is a leading indicator of existing home sales given that contracts are signed a few months before homes are actually sold.
The U.S. housing market has been trying to stabilize after seeing significant weakness through most of 2023 and early 2024. Many potential home buyers have been priced out of the market due to rising prices and higher mortgage rates.
