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For the second straight month, pending sales ticked up, growing 1.5 percent in a surprise turnout, according to the latest National Association of REALTORS® (NAR) Pending Home Sales Index, based on contract signings. Compared to last year, pending sales surged 3.9 percent.

Credit: National Association of REALTORS®

“Even though home prices are rising faster than income, national buying power has increased by 6 percent because of better interest rates,” Lawrence Yun, chief economist at NAR, says. “Furthermore, we’ve seen increased foot traffic as more buyers are evidently eagerly searching to become homeowners.

“Going forward, interest rates will surely not decline in a sizable way, so the changes in the median price will be the key to housing affordability—but home prices are rising too fast because of insufficient inventory,” Yun says. “In addition to boosting traditional home-building, we should explore a greater utilization of modular factory-constructed homes, converting old shopping malls or vacant office space into condominiums, permitting more accessory dwelling units, and other supply-increasing actions, in order to meet the rising demand for new housing.”

According to data from realtor.com®, including in NAR’s update, active listings jumped in Fort Wayne, Ind.; Pueblo, Colo.; Columbus, Ohio; and Topeka, Kan., in September.

For more information, please visit www.nar.realtor.

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