(Reuters) – Contracts to buy U.S. previously owned homes rose unexpectedly in October, notching a third straight month of increases, despite high mortgage rates and as inventory of properties for sale continued to build and a healthy job market fortifies the finances of prospective buyers.
The National Association of Realtors (NAR) said on Wednesday its Pending Home Sales Index, based on signed contracts, rose 2.0% last month to 77.4 – the highest since March – from 75.9 in September. Economists polled by Reuters had forecast contracts, which become sales after a month or two, would fall 2.0% after increasing 7.5% in September, the largest increase in more than four years.
Pending home sales rose 5.4% from a year earlier and all four regions saw month-over-month and year-over-year increases.
“Homebuying momentum is building after nearly two years of suppressed home sales,” said Lawrence Yun, the NAR’s chief economist. “Even with mortgage rates modestly rising despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.”
