• Increase reverses prior month's decline.

• Sales rebound in each region.

Pending home sales improved 7.5% (-1.4% y/y) in October after falling a little-revised 2.4% in September. A 0.9% rise had been expected. It was the highest level of sales since December 2020, up 7.9% from the low this past April.

The Realtors Association indicated, "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."

Sales rose in each of the four major regions of the country. The largest gain was in the Midwest, where sales surged 11.8% (5.1% y/y). The second largest rise was in the South which posted an 8.0% (0.6% y/y) increase. In the Northeast, pending home sales strengthened 6.9% (-10.0% y/y) and in the West, sales gained 2.1%, but still were down 6.2% y/y.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's PREALTOR database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.