NAR’s August 2025 Pending Home Sales: 4% Rise Signals Market Momentum

Low Rates Drive Buyer Surge Across U.S. Regions

The National Association of REALTORS® (NAR) August 2025 Pending Home Sales Report shows a 4.0% increase in contracts from July and 3.8% from last year. Falling mortgage rates are fueling the housing market, especially in the affordable Midwest. For buyers, sellers, and real estate pros, this points to a vibrant fall market. Let’s dive into the details!

Understanding the Surge and Its Impact

The NAR’s Pending Home Sales Index (PHSI) tracks signed contracts for homes—single-family houses, condos, and co-ops—that haven’t closed yet, acting like a crystal ball for future sales. A score of 100 reflects the contract activity of 2001, a benchmark year. In August 2025, the PHSI climbed 4.0% from July and 3.8% from August 2024, driven by mortgage rates dropping below 6.5% in many areas. NAR Chief Economist Lawrence Yun noted, “Lower mortgage rates are enabling more home buyers to go under contract,” especially in affordable regions like the Midwest. Regionally, the Midwest led with an 8.7% monthly and 6.7% yearly increase, thanks to low prices in states like Ohio and Illinois. The South followed with a 3.1% monthly and 4.2% yearly rise, fueled by job growth and migration to places like Texas and Florida. The West saw a 5.0% monthly gain but only 0.2% yearly, as high costs in California limit progress. The Northeast dipped 1.1% monthly but grew 2.6% yearly, slowed by pricey urban markets like Boston. These pending home sales trends show a market gaining steam, with all regions up year-over-year, signaling broad buyer confidence.

What’s Next for Buyers, Sellers, and Communities

For buyers, the 4% surge in pending home sales means a busier market with more competition, but low rates make now a great time to lock in a loan. NAR’s REALTORS® Confidence Index shows 19% of agents expect more buyer traffic soon, up from 16% in July. Sellers can expect quicker showings and stronger offers, with national inventory at 4.6 months, offering a balanced market for negotiations. Seller optimism is at 19%, slightly down from 21% last month, but still solid. Homeowners associations (HOAs) may see more resident turnover and dues to manage as sales rise, requiring efficient systems to keep up. Investors eyeing opportunities, especially in the Midwest’s affordable markets, should note median home prices hit $422,600, up 2% from last year, making due diligence critical. Agents need to focus on speeding up closings to avoid delays from inspections or financing. NAR’s next reports on October 23 (Existing-Home Sales) and October 29 (PHSI) will show if this momentum holds, but with low rates and steady inventory, fall 2025 looks promising.