Pending Home Sales Edge Up in August Despite Higher Rates

Pending home sales rose slightly in August on a monthly basis, but fell year over year as climbing mortgage rates kept many prospective buyers on the sidelines.

Contract signings ticked up 0.3% from July, but plunged 4.7% compared to August 2025, according to the National Association of Realtors^® Pending Home Sales report released Thursday.

"Buyers steadily entered into contracts in August even though mortgage rates increased," says NAR Chief Economist Lawrence Yun. "However, the housing market is still sluggish, with contract signings below last year. This is due to higher mortgage rates offsetting the increased buying power created by job gains and income growth outpacing home price growth."

Yun points out that nationally, current contract activity remains roughly 30% below pre-pandemic years. Transactions peaked in 2021 when mortgage rates fell to historic lows near 3% and has not approached that level since.

Mortgage rates have been on an upward trajectory since the outbreak of the U.S.-Iran war in February. Last week, the average rate on 30-year fixed home loans reached a 15-month high of 6.76%.

In August, month-over-month pending sales saw gains in the South and West, but retreated in the Northeast and Midwest. Meanwhile, the year-over-year pullback was recorded throughout the U.S.

"The Northeast and the Midwest saw the fastest home price growth in August, which is part of the reason that those same two regions posted the steepest declines in contract signings," says Yun.

At the regional level, the Northeast saw the biggest month-over-month pullback in contract signings, which decreased 4.2%, followed by the Midwest, at 1.6%.

Looking at annual shifts in pending sales, the West experienced a 6.7% drop, followed by the Midwest (4.9%0; Northeast (3.9%), and South (3.8%).

Among the 50 largest markets, Richmond, VA, led the nation with a 11.3% year-over-year surge in pending sales. San Antonio, TX, came a distant second, with a 6.6% increase, followed by Memphis, TN, with 6.4%.

Metros with biggest pending home sale increases in August

1. Richmond, VA (+11.3%)
2. San Antonio, TX (+6.6%)
3. Memphis, TN (+6.4%)
4. Virginia Beach, VA (+5.1%)
5. Cincinnati, OH (+4.7%)
6. Austin, TX (+4.2%)
7. Birmingham, AL (+4.0%)
8. Sacramento, CA (+1.7%)
9. Indianapolis, IN (+0.9%)
10. St. Louis, MO (+0.2%)

This is a developing story. Please check back for updates.