October saw buyers return in droves to the housing markets, even though mortgage rates were rising.

The National Association of Realtors reported that signed contracts on homes in the pipeline, or pending sales, increased 7.5% since September. While sales are still below October 2020 by 1.4%, the last fall saw a peak in the housing sector.

Indicators of the likelihood that sales will close within one to two weeks are called pending sales. Wall Street analysts expected October’s pending sales would be flat in comparison to the previous month.

Unexpectedly, October saw a rise in closed sales.

Lawrence Yun (NAR chief economist) stated that consumers are being motivated by rising rents and anticipated increases in mortgage rates. “Consumers who are financially sound are signing agreements to buy a house sooner than they should.” The solid buying is an indication that demand is still high as inventory remains low.

The Midwest and South were the most successful regions for sales, with their respective growths of 11.8% and 8.0% respectively.

Pending sales in the Northeast rose 6.9% compared with October and they increased by 2.1% in the West.

Mortgage News Daily reports that the 30-year fixed-rate mortgage, which is very popular, had a rate of just 0.3% at mid-September. It rose to 3.2% by October. However, mortgage rates fell last Friday due to the news that the Coronavirus was now Omicron.

The number of homes available for purchase by homebuyers is decreasing, particularly at the lower end. The total housing inventory^{At the end October, 1.25 Million Units were sold. This was 0.8% less than September and 12.0% lower than one year ago (1.42million). This is a 2.4 month supply at the October sales pace. A supply between 4 and 6 months is considered to be a market that’s balanced for buyers as well as sellers.}

This year has been very strong thanks to the fall spike in homebuying also evident in closed sales. The surge in homebuying that began last year was just months after the U.S. pandemic. Although many expected it to slow down, it seems it is still going strong.

Yun said that “the notable increase in October ensures that total existing home sales will exceed 6,000,000 in 2021 which will form up to the best performance in fifteen years.”

Signed contracts are used to measure sales of new-built homes. However, October saw a decline in the number of sold houses. This could be because big builders slow down their sales to resolve supply chain issues.