(Kitco News) - Hopes for a stabilizing U.S. housing market were bolstered after the number of potential home buyers rose beyond expectations last month, according to the latest data from the National Association of Realtors (NAR).
The U.S. pending home sales index rose 1.9% in October, the NAR announced on Tuesday. The data was significantly better than forecasts, as economists expected a 0.5% rise. September’s print was revised to 0.1% from the initial flat reading. Sales rose in the Northeast, Midwest and South, but declined in the West.
For the year, pending home sales fell -0.4% against expectations for a -2.4% decrease and following the revised -0.9% drop in September. Year-over-year sales increased in the Midwest and South, and decreased in the Northeast and West.
“The Midwest shined above other regions due to better affordability, while contract signings retreated in the more expensive West region,” said NAR Chief Economist Lawrence Yun. “Days on the market typically lengthen from November through February, providing better negotiating power to buyers during the holiday season.”
“Job gains in September, following the data blackout, are reassuring and suggest the economy is not slipping into a recession,” Yun added. “This may boost confidence in future homebuying.”
Spot gold was coming off session lows in the minutes following the housing data. It last traded at $4,129.26 per ounce for a loss of 0.11% on the day.
The report noted that August’s Realtor’s Confidence Index survey showed that 17% of NAR members expect an increase in buyer traffic over the next three months, down from 20% in September and 19% one year ago. Meanwhile, 16% expect an increase in seller traffic, down from 19% the previous month and 19% in October 2024.
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 over the past two years. Many potential home buyers have been priced out of the market due to rising prices and high mortgage rates.
