Pending home sales in the U.S. are back up, posting the highest gain since 2021. According to housing market platform Redfin, pending home sales rose 2% in the four weeks ending Oct. 6, marking the largest increase in three years. Additionally, mortgage-purchase applications increased by 8% month-over-month, and new listings are up 5.7% year-over-year.
The improvement in sales may slow in the coming weeks, as mortgage rates started rising last Friday after a surprisingly strong jobs report. Daily average mortgage rates jumped to 6.62% on Monday from 6.26% last Thursday. We expect some buyers may back off due to rising rates, but not all of them: Mortgage rates are still significantly lower than they were a year ago–and lower than earlier this year–and the Fed is on track to continue cutting interest rates.
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