WASHINGTON — Pending home sales edged higher in August, but the modest monthly improvement did little to change a housing market still operating well below last year’s pace.
The National Association of Realtors’ Pending Home Sales Index increased 0.3% from July to a reading of 71.2 in August. Compared with August 2025, pending transactions were down 4.7%.
The index tracks signed contracts for existing single-family homes, condominiums and co-ops and generally leads completed existing-home sales by one to two months, making it an important early indicator of housing demand.
“Buyers steadily entered into contracts in August even though mortgage rates increased,” NAR Chief Economist Lawrence Yun said. “However, the housing market is still sluggish, with contract signings below last year.”
Yun said higher mortgage rates have offset some of the additional purchasing power created by job gains and income growth outpacing home-price growth. Nationally, he said contract signings remain roughly 30% below levels seen in the years leading up to the pandemic.
A Divided Regional Picture
The August data showed a pronounced regional split. Pending sales increased 3.0% in the West and 2.3% in the South from July. Contract signings fell 4.2% in the Northeast and 1.6% in the Midwest.
All four regions remained below their August 2025 levels. The West recorded the largest annual decline at 6.7%, while the South posted the smallest decrease at 3.8%.
Yun pointed to faster home-price growth in the Northeast and Midwest as one factor behind weaker contract activity in those regions.
Housing Demand Remains Constrained
The report reinforces the affordability pressure still shaping the housing market. Buyers have gained some purchasing power from income growth and slower price appreciation in parts of the country, but elevated borrowing costs continue to limit how much house many households can afford.
The 0.3% national increase follows a 2.3% decline in July and suggests buyers have not disappeared from the market. But with pending sales still 4.7% below a year ago and contract activity substantially below pre-pandemic norms, August’s improvement is better viewed as stabilization than a broad housing-market rebound.
The next test will be whether signed contracts can build momentum as they move toward completed sales — particularly if mortgage rates remain elevated.
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