More Homebuyers Are Signing Contracts—Midwest Leads the Surge

Homebuyers are becoming more active this fall as housing affordability gradually improves. According to the National Association of REALTORS® (NAR), the Pending Home Sales Index—an early indicator of future home sales based on contract signings—rose nearly 2% nationwide in October. However, pending sales are still slightly below last year’s level, down 0.4%, as some buyers continue to wait on the sidelines.

The Midwest is currently driving the strongest growth in contract activity. Pending home sales in the region jumped 5.3%, outperforming every other part of the country, largely due to more affordable home prices.

“The Midwest shined above other regions due to better affordability, while contract signings retreated in the more expensive West region,” says Lawrence Yun, NAR’s chief economist.

Existing-home sales also reflected this momentum, with the Midwest seeing a 5.3% increase from September—its strongest regional gain. In October, the Midwest’s median home price stood at $319,500, significantly lower than the South ($362,300), Northeast ($503,700), and West ($628,500).

Yun adds that first-time buyers are finding better opportunities in the Midwest because of the availability of affordable homes, and in the South thanks to adequate inventory. Meanwhile, limited supply continues to challenge buyers in the Northeast, and high prices in the West are keeping many new buyers out.

Housing Momentum Builds as Rates Ease

Across the country, buyer interest is rising as mortgage rates decline. The average 30-year fixed mortgage rate has dropped to 6.26%, down from around 7% earlier in the year. Improved affordability and more price adjustments in some markets are helping hesitant buyers return.

Yun notes that the upcoming holiday season may offer even more advantages:

“Days on the market typically lengthen from November through February, providing better negotiating power to buyers.”

Existing-home sales rose 1.2% in October and are up 1.7% from last year. Mortgage applications for home purchases have also jumped 26% annually, showing strong buyer demand.

Improving job data after a brief government data freeze is also boosting confidence.

“Job gains in September… suggest the economy is not slipping into a recession,” Yun says. “This may boost confidence in future home buying.”

Looking ahead, Yun predicts existing-home sales could rise 14% in 2026, as mortgage rates drift toward an average of 6%, making homeownership more accessible for long-waiting buyers.

Pending Home Sales Breakdown – October

Northeast:

• +2.3% from September

• -1% from October 2024

Midwest:

• +5.3% from September

• +0.9% from October 2024

South:

• +1.4% from September

• +2% from October 2024

West:

• -1.5% from September

• -7% from October 2024