Pending home sales in the United States surged to their highest level since early 2023, according to data released on December 29, 2025, by the National Association of Realtors (NAR). The report revealed that contracts to purchase previously owned homes rose by 3.3 percent in November compared to the prior month, exceeding economists’ expectations. On a year-over-year basis, the index increased by 2.6 percent, pointing to a broad-based resurgence in buyer activity across all major U.S. regions: the Northeast, Midwest, South, and West.
This unexpected rise in pending home sales comes as the housing market enters a transitional phase after nearly two years of volatile conditions marked by fluctuating interest rates, constrained inventory, and inflation-driven affordability issues. The November data suggest that the market may be finding its footing as several key factors begin to align in favor of prospective buyers.
One of the most significant contributors to the uptick in pending sales has been the decline in mortgage interest rates. After reaching multi-year highs in the first half of 2025, rates began to ease in the third and fourth quarters, supported by the Federal Reserve’s shift toward monetary easing. Several rate cuts during the year helped bring borrowing costs down, increasing purchasing power for many would-be homebuyers. Although the Fed has indicated it may pause further cuts in early 2026, the impact of its recent policy decisions is already being felt across the real estate sector.
Improved affordability conditions have also been fueled by modest wage gains, which in many areas of the country have begun to outpace home price appreciation. This dynamic has helped close the affordability gap that sidelined many buyers in recent years. While home prices remain elevated by historical standards, the combination of lower borrowing costs and rising incomes is creating more favorable conditions for homeownership.
Another encouraging sign in the November data is the widespread nature of the sales increase. Unlike earlier in the year, when gains were often concentrated in specific regions or price segments, the latest figures show strength across all four major U.S. regions. The West led with the largest month-over-month gain, a notable shift after several quarters of cooling demand. The Midwest and South, which have consistently shown resilience due to relative affordability and growing population centers, also posted healthy gains, while the Northeast rebounded from prior stagnation.
Housing inventory has also improved compared to previous years. While the market remains tight by historical standards, the number of active listings has increased in many metro areas, giving buyers more choices and reducing the urgency that defined the pandemic-era housing frenzy. This increase in supply, though still below the level needed for a fully balanced market, has begun to ease some of the competition and pressure that drove prices up in 2021 and 2022.
Economists caution, however, that while the rise in pending home sales is a promising development, it does not yet indicate a full recovery. The housing market remains sensitive to economic variables including inflation, job growth, and interest rate expectations. A sudden reversal in mortgage trends or a broader economic slowdown could still dampen buyer enthusiasm. Additionally, the lag between a pending sale and a completed transaction—typically four to six weeks—means that the November surge may not fully materialize in closed sales until early 2026.
Realtors across the country have reported a noticeable uptick in buyer inquiries and showings in recent weeks, with many attributing the renewed activity to improved financing conditions and increased inventory. Some industry professionals are hopeful that the uptick in pending sales will translate into a stronger spring market, traditionally the most active period for real estate transactions.
The National Association of Realtors’ Pending Home Sales Index, which tracks signed contracts for existing homes, has long been regarded as a reliable indicator of near-term housing activity. Its latest reading suggests that after months of stagnation, buyer sentiment may be turning a corner.
As 2026 approaches, attention will shift to whether this trend continues and how the broader economy supports or undermines housing demand. With inflation showing signs of easing and interest rates stabilizing, many experts believe the conditions are in place for a more sustainable rebound in the housing sector. However, persistent challenges, including high home prices and limited new construction, remain obstacles to a full market recovery.
For now, the November surge in pending home sales offers a bright spot for an industry that has weathered significant headwinds over the past two years. While the road ahead remains uncertain, the data suggests that buyers are returning to the market—and that the foundations for a stronger housing cycle in 2026 may already be taking shape.
