Yet, Year-Over-Year Pending Activity Still Lags
Pending home sales picked up in October 2025 as lower borrowing costs and improving sentiment helped bring more buyers into the market, though contract activity remained slightly below last year’s levels, according to a report released Tuesday by the National Association of Realtors.
The NAR Pending Home Sales Index climbed 1.9% from September 2025, marking a broad improvement across three of the nation’s four major regions. The Northeast, Midwest and South all posted month-to-month gains, while the West continued to soften. Compared with October 2024, pending sales fell 0.4% nationally, with year-over-year increases in the Midwest and South offset by declines in the Northeast and West.
The report, a widely watched leading indicator of housing demand, tracks the number of homes that have gone under contract but not yet closed–signaling the direction of completed sales in the months ahead.
NAR’s latest Realtor Confidence Index suggested waning optimism among professionals heading into the winter season. Seventeen percent of surveyed members expect an increase in buyer traffic over the next three months, down from 20% in September and 19% a year earlier. Expectations for seller traffic also slipped, with only 16% anticipating gains, compared with 19% last month and in October 2024.
Lawrence Yun, NAR’s chief economist, said the relative strength of the Midwest reflects a continued affordability edge over other regions. “The Midwest shined above other regions due to better affordability, while contract signings retreated in the more expensive West region,” he said. He added that typical seasonal patterns may benefit buyers in the months ahead, as “days on the market typically lengthen from November through February, providing better negotiating power during the holiday season.”
Yun also pointed to recent job gains as a stabilizing force for the broader economy. “Job growth in September, following the data blackout, is reassuring and suggests the economy is not slipping into a recession,” he said. “This may boost confidence in future home buying.”
Regionally, October’s increases were led by a 5.3% jump in the Midwest, where pending sales were also up 0.9% from a year earlier. The South posted a 1.4% monthly gain and a 2% annual increase. In the Northeast, contract signings rose 2.3% on the month but remained 1% below last year. The West was the only region to decline, falling 1.5% in October and down a sharper 7% from a year ago.
Despite ongoing affordability challenges, the modest uptick in contract activity suggests that easing mortgage rates and resilient employment could be laying groundwork for a more active housing market heading into 2026.
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