Home contract signings jumped in August as mortgage rates dropped

Core Insights - Home contract signings increased by 4% in August, surpassing economists' expectations of a 0.4% gain, indicating a potential recovery in the housing market due to lower mortgage rates [1][5] - The Pending Home Sales Index reached 74.7, with a year-over-year increase of 3.8%, suggesting a gradual improvement in buyer activity [1][3] - The Midwest region experienced the highest growth in contract signings, with an 8.7% increase since July and a 6.7% rise over the past year, attributed to its relative affordability [6] Mortgage Rates - The average 30-year fixed mortgage rate has decreased from approximately 6.7% to around 6.3%, which is believed to be facilitating more homebuyers entering the market [5][6] - Lower mortgage rates are seen as a key factor enabling more homebuyers to sign contracts, according to the National Association of Realtors Chief Economist [5] Market Conditions - The housing market is currently in its third consecutive year of decline, with home sales projected to reach a 30-year low, although there is optimism that falling mortgage rates may stimulate activity in the fall [3][5] - Contract signings showed varied performance across regions, with increases in the Midwest, South, and Western US, while the Northeast saw a decline [1][3]