The National Association of Realtors’ Pending Home Sales Index dropped 2.2 percent, to 130, in September after four consecutive months of contract activity growth. The news comes on the heels of August’s pending-home sales data, which showed a strong 8.8 percent increase in the index month-over-month.

Overall year-over-year contract signings, however, increased 20.5 percent. A pending sales index of 100 represents the level of contract activity present in 2001.

Although all four regions saw annual increases in pending home sales, the Northeast was the only region that saw month-over-month gains in September, with growth of 2 percent, to 119.4, which was up by 27.7 percent from one year ago.

“The demand for homebuying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” NAR Chief Economist Lawrence Yun said in a statement. “With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

Credit: National Association of Realtors

Still, although demand remains relatively strong, the decline in home sales may be signaling the beginning of a seasonal slowdown, which in any other year, would have taken place much earlier in the fall.

“September contract signings pointed to a seasonal slowdown, with an unexpected 2.2 percent decline over August, because many buyers struggled with steeply rising prices and shrinking inventory of homes for sale,” Senior Economist George Ratiu said in a statement. “The Midwest and South posted the sharpest monthly drops.”

The Midwest index dropped 3.2 percent month-over-month to 120.5, up 18.5 percent from the year before.

In the South, pending-home sales declined 3 percent to an index of 150.1, which was up 19.6 percent from September 2019.

The West’s index decreased 2.6 percent, to 116.8, up 19.3 percent from the year before.

As the coronavirus pandemic continues, Yun said more buyers will undoubtedly continue to enter the market as they find new needs for their home during quarantine.

“Additionally, a second-order demand will steadily arise as homeowners who had not considered moving before the pandemic begin to enter the market,” Yun said. “A number of these owners are contemplating moving into larger homes in less densely populated areas in light of new-found work-from-home flexibility.”

Email Lillian Dickerson

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Las Vegas is back and there are only a few presale tickets left! Register today before they're gone.REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription