US Pending Home Sales Rise Most In Almost A Year As Mortgage Rates Slide

US housing market data showed a mixed picture in September. New home sales were strong, and existing home sales showed signs of recovery from previous lows. This improvement was partly due to declining mortgage rates, offering some relief on affordability. However, the latest pending home sales data for September was disappointing, showing no month-over-month change. This contrasted with expectations of a 1.2% increase, although August's data was revised upwards. On a year-over-year basis, pending home sales did increase by 1.5%, marking the best performance since November 2024. Despite this, the overall index remained far from record highs. Economists suggest that a softening job market, rather than strong equity markets or housing wealth, contributed to the disappointing pending sales figures. Mortgage rates are expected to continue their downward trend, improving affordability, although a government shutdown could pose a temporary impediment. The waning "lock-in effect" is also contributing to increased housing inventory. Regionally, the South saw the most significant increase in contract signings for previously owned homes.