NAR: Pending Home Sales Rose in August as Mortgage Rates Eased

CHICAGO — Falling mortgage rates gave prospective buyers more confidence to act in August, driving up contract signings nationwide and signaling potential strength in the housing market this fall.

The National Association of Realtors® (NAR) Pending Home Sales Index, which tracks signed contracts as a forward-looking measure of home sales, increased 4% in August from July and was 3.8% higher than a year earlier.

Mortgage Rates Unlock Buyer Activity

NAR Chief Economist Lawrence Yun attributed the momentum to easing borrowing costs, with mortgage rates recently dipping below 6.5%.

“Lower mortgage rates are enabling more home buyers to go under contract,” Yun said. “In the Midwest, low mortgage rates combined with higher levels of affordability are attracting more buyers compared to other regions.”

Midwest Leads the Way

The Midwest outperformed all other U.S. regions in August, supported by home prices that remain 22% below the national median. The median price in the region stood at $330,500 in August.

Pending home sales in the Midwest surged 8.7% from July and were up 6.7% year-over-year, making it the strongest-performing region for both pending and existing-home sales.

Regional Breakdown of Pending Sales in August

• Northeast: Down 1.1% from July but up 2.6% annually

• Midwest: Up 8.7% monthly and 6.7% annually

• South: Up 3.1% monthly and 4.2% annually

• West: Up 5% monthly and 0.2% annually

Outlook for Fall

The broader housing market has faced headwinds in recent years from elevated rates and tight inventory. Existing-home sales dipped 0.2% in August compared to July. Still, Yun remains optimistic.

“Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory,” he said. “However, mortgage rates are declining, and more inventory is coming to the market, which should boost sales in the coming months.”

Mortgage Applications Add to Optimism

Another encouraging sign: mortgage applications for home purchases are up 18% from last year, according to the Mortgage Bankers Association. At the same time, mortgage rates have fallen from near-7% highs earlier in 2025, averaging 6.30% as of Sept. 25, based on Freddie Mac’s Mortgage Market Index.