Homebuyers seized on lower mortgage rates in October, sending contract activity higher

Core Insights - Home contract signings increased by 1.9% in October compared to September, indicating that lower mortgage rates have attracted more buyers despite the ongoing government shutdown [1][2] - Pending home sales rose across the country, with the Midwest experiencing the largest increase of 5.3% from the previous month, while the West was the only region to see a decline [1] - Although contract signings improved month-over-month, they are still down 0.4% compared to the same period last year [2] Mortgage Rates - Mortgage rates fell to 6.17% by the end of October, marking the lowest level of the year, although they have since seen a slight increase [2] - The decline in mortgage rates has been a significant factor in encouraging buyer activity during the fall season [3] Market Constraints - Despite the increase in buyer activity, significant constraints remain in the housing market, and home sales are expected to remain slow through the end of 2025 [3] - The government shutdown created uncertainty for buyers, although most mortgage lending continued normally, with some disruptions affecting specific loan programs [4] Future Sales Activity - Pending home sales data serves as a leading indicator for future sales activity, as homes typically go under contract one to two months before being sold [4]