Lower Mortgage Rates Boost Home Sales in August
by Heather Jackman email: [email protected]
Monday, Sep 29, 2025 - 10:08 AM
The U.S. housing market had a mixed performance in August. New home sales increased a lot because builders offered big incentives, while some other home sales were at near-record lows. This made the report on pending home sales especially important, as it showed whether people were buying more or less.
Market Performance Shows Strong Recovery
In August, pending home sales—houses that are under contract but not yet sold—jumped 4% from the previous month. This was the biggest monthly increase since March and raised sales slightly compared to last year.
Economists had expected little change, so this was higher than most predictions. "Lower mortgage rates are helping more buyers sign contracts," said Lawrence Yun, chief economist at the National Association of Realtors.
The increase was strongest in the Midwest, where sales went up nearly 9%, the most since early 2023. The South and West also saw more contract signings.
Mortgage rates have fallen to 6.34%, the lowest in a year. This has encouraged more Americans to buy homes and some homeowners to finally sell.
However, many people still have older, lower-rate mortgages and don't want to move. This keeps the number of available homes (inventory) limited, which keeps prices high.
Even though more people are listing their homes, prices haven't dropped yet.
Pending home sales are important because they usually predict what will happen in the market for existing homes in the next month or two.
Questions? Thinking about selling or buying a home? Contact Heather Jackman at 215.431.0884 [email protected]