US Pending Home Sales Soar In October

After surprising to the downside in September, October’s pending home sales soared 7.5% MoM, for greater than the +1% expected (from a downwardly revised 2.4% MoM drop). However, despite the jump, sales are down on a YoY basis for the 5th straight month…

Source: Bloomberg

The pending home sale index is back near post-COVID highs…

Source: Bloomberg

Sales were up in all regions:

• Northeast up 6.9% m/m; Sept. fell 3.2%

• Midwest up 11.8% m/m; Sept. fell 3.5%

• South up 8% m/m; Sept. fell 2.1%

• West up 2.1% m/m; Sept. fell 1.4%

Pending home sales are often looked to as a leading indicator of existing-home purchases given properties typically go under contract a month or two before they’re sold.

“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” Lawrence Yun, NAR’s chief economist, said in a statement.

“This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.”

And all this as homebuyers’ sentiment is crashing to record lows… makes you wonder who is buying, eh?