After sliding in July, pending home sales returned to positive territory in August, ticking 0.6% higher month over month as mortgage rates declined, the National Association of REALTORS® (NAR) said, citing its Pending Home Sales Index.          

Year over year, they were down 3%.  

Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two.      

 “A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” NAR Chief Economist Lawrence Yun said in a press release. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”  

Regionally, pending sales were mixed. They rose month over month in the Midwest, South and West, and fell in the Northeast, while they fell year over year in the Northeast, Midwest and South, and rose in the West.  

“While home sales lagged last year’s trends for most of this year, the recent drop in mortgage rates, led by the anticipation of the Fed rate cut, brought mortgage rates to a more comfortable range for buyers and sellers,” CoreLogic Chief Economist Selma Hepp said in a statement. “Home buying activity, reflected in pending contracts being signed, already points to renewed interest among buyers and a brighter housing market outlook going forward.”