Pending home sales rebounded by 7.5% in October following a small decline of 2.4% in September, continuing their rise from a recent low in April, according to new data on Monday from the National Association of Realtors.
The sharp increase in contract signings month-over-month pointed to housing demand that has regained some momentum as buyers take advantage of low mortgage rates that are anticipated to rise next year.
Because pending sales often translate into home sales after one or two months, we should expect sales of existing homes to continue their solid run in the last two months of the year.
Pending home sales increased in all four regions with the Midwest leading the way, up by 11.8%, and the South up by 8.0%.
But even with the gains in recent months, we do not expect the housing market to reach its pandemic peak in late 2020.
The complication around the new COVID-19 variant, omicron, will play a role in how the housing market will advance in the coming months, affecting the supply of houses, which continues to lag demand.
Modest price gains will be a possibility in the next several months, according to the NAR, while an increase in mortgage rates will slow demand.
Still, the market is expected to stay above the pre-pandemic level going into early next year.