August Pending Home Sales Rise Monthly, Fall Annually

Pending home sales experienced a slight monthly increase in August, rising by 0.3% compared to July, but saw a significant year-over-year decline of 4.7% against August 2025 figures. This trend, detailed in the National Association of Realtors® Pending Home Sales report released on Thursday, indicates a market grappling with elevated mortgage rates that are deterring potential buyers. Lawrence Yun, NAR Chief Economist, noted that while buyers continued to enter into contracts in August despite rising rates, the overall market remains sluggish, with contract signings falling below the previous year's levels. This slowdown is attributed to higher mortgage rates negating the positive impact of job gains and income growth that are outpacing home price appreciation. Yun further highlighted that current contract activity nationally is approximately 30% below pre-pandemic levels. The market previously peaked in 2021 when mortgage rates were near historic lows of 3%, a level not seen since. Mortgage rates have been on an upward trend since February, coinciding with the outbreak of the U.S.-Iran war. The average rate for a 30-year fixed home loan reached a 15-month high of 6.76% in the week preceding the report. Regionally, August saw month-over-month gains in pending sales in the South and West, while the Northeast and Midwest experienced declines. However, the year-over-year decrease in pending sales was observed across all regions of the United States. Yun explained that the Northeast and Midwest, which recorded the fastest home price growth in August, also experienced the steepest drops in contract signings. Specifically, the Northeast saw the largest month-over-month decrease in contract signings at 4.2%, followed by the Midwest at 1.6%. On an annual basis, the West recorded the most significant drop in pending sales, with a 6.7% decrease, followed by the Midwest (4.9%), the Northeast (3.9%), and the South (3.8%). Among the 50 largest metropolitan markets, Richmond, Virginia, led the nation with an 11.3% year-over-year increase in pending sales. San Antonio, Texas, followed with a 6.6% increase, and Memphis, Tennessee, recorded a 6.3% rise.