Pending home sales eked out a slim gain in August, but the annual trend tells a different story
Pending home sales in the United States rose a modest 0.3% in August, defying analyst expectations of a decline even as borrowing costs climbed to their highest level in more than a year, according to data released Thursday by the National Association of Realtors (NAR).
The NAR's Pending Home Sales Index reached 71.2 last month. The result snapped a two-month losing streak, though the monthly gain obscured deeper structural weaknesses.
On a year-over-year basis, contract signings fell 4.7%, with declines recorded across all four major US regions.
Lawrence Yun, chief economist at NAR, said August's uptick reflected ongoing buyer activity in the face of rising costs.
"Buyers steadily entered into contracts in August even though mortgage rates increased," Yun said.
"However, the housing market is still sluggish, with contract signings below last year. This is due to higher mortgage rates offsetting the increased buying power created by job gains and income growth outpacing home price growth."
South and West drive slim monthly recovery
Regional data revealed a divided market. The South posted a 2.3% monthly gain while the West rose 3.0% — both regions benefiting from relatively healthier inventory conditions.
The Northeast fell 4.2% month over month and the Midwest declined 1.6%. Yun tied the performance gap directly to price dynamics.
"The Northeast and the Midwest saw the fastest home price growth in August, which is part of the reason that those same two regions posted the steepest declines in contract signings," he said.
The 30-year fixed-rate mortgage averaged 6.76% last week, according to Freddie Mac's Primary Mortgage Market Survey, the highest reading in more than a year.
The benchmark 10-year US Treasury yield has held near 5.0%, driven in part by persistent inflation and uncertainty over the Federal Reserve's next move.
The Fed raised interest rates Wednesday for the first time since July 2023, adding further pressure to an already constrained borrowing environment.
Glen Weinberg of Fairview Commercial Lending says brokers who understand their deal, know their lender's criteria, and maintain direct borrower relationships are far more likely to earn lender confidence and get deals across the finish line.https://t.co/dbwhXMWinS
— Mortgage Professional America Magazine (@MPAMagazineUS) September 9, 2026
The 30% gap that defines today's market
The broader context remains sobering. Yun noted that the gulf between current and pre-pandemic transaction levels has not materially narrowed.
"Nationally, contract signings today are running roughly 30% below where they were in the years leading up to the pandemic," he said.
"Transaction activity peaked in 2021 when mortgage rates fell to near 3%, a historic low, and has not approached that level since."
As pending home sales hit their 2026 low in July, brokers have been repositioning client conversations around longer time horizons and more modest starter-home expectations.
At the metro level, several markets outperformed the national trend. Among the 50 largest US metros, Richmond, Virginia, posted the largest annual gain at 11.3%, followed by San Antonio-New Braunfels, Texas, at 6.6%, and Memphis, Tennessee-Mississippi-Arkansas, at 6.4%, according to Realtor.com Economics data.
Virginia Beach-Chesapeake-Norfolk, Virginia-North Carolina, and Cincinnati, Ohio-Kentucky-Indiana, also recorded annual gains of 5.1% and 4.7%, respectively.
After existing-home sales slid for a second straight month in July, the slim monthly improvement in pending deals suggests demand has stabilized rather than recovered.
June had already signaled trouble, with pending home sales posting their steepest monthly drop of 2026 — a 5.4% contraction — before July extended the weakness further.
August's rebound does not reverse that trajectory; it reflects a market defined by slow erosion rather than a decisive turn.
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