Have you ever watched the housing market and wondered if it’ll ever feel “normal” again? You know, like back when rates were low, inventory was decent, and buying a home didn’t feel like climbing Everest? Well, something interesting happened in November that might just signal a shift.
Contract signings for existing homes shot up more than expected, marking the strongest reading in almost three years. It’s the kind of data point that gets real estate pros excited—and maybe gives hopeful buyers a reason to pay closer attention.
A Welcome Surge in Pending Sales
The numbers don’t lie: pending home sales climbed a solid 3.3% from October, blowing past most forecasts. That pushed the index to its highest level since early 2023. More importantly, we’ve now seen four straight months of gains—the longest streak since those wild pandemic days when everyone seemed to be moving at once.
In my view, this isn’t just random noise. It’s the market responding to some real improvements in affordability. Rates have pulled back from their spring peaks, and price growth has cooled considerably compared to last year. Suddenly, waiting on the sidelines doesn’t feel quite as smart as it did six months ago.
What Exactly Are Pending Home Sales?
If you’re not deep in real estate jargon, pending sales are basically contracts that have been signed but not yet closed. Think of them as a leading indicator—they usually predict actual closed sales about one to two months down the road.
Why do they matter so much? Because they capture buyer sentiment in real time. When people are out there signing contracts, it means they’re confident enough to commit. And right now, that confidence appears to be building across the country.
Breaking Down the Regional Strength
One of the most encouraging aspects of this report was how broad-based the gains were. Every major region saw increases, with some areas performing particularly well.
- The West led with the biggest jump, finally showing signs of life after being hammered by high prices and low inventory.
- The South, which accounts for the largest share of sales nationally, posted solid gains too.
- Even the Midwest and Northeast contributed to the upward momentum.
This kind of widespread improvement suggests we’re not looking at a localized blip. It’s more like the entire market is starting to thaw at once.
The Role of Mortgage Rates
Let’s be honest—mortgage rates have been the elephant in the room for years now. When they spiked toward 7% earlier this year, a lot of potential buyers simply froze. Why commit when waiting might save you thousands?
But something changed in recent months. Rates settled into a more comfortable range, hovering in the low-to-mid 6% zone. That might not sound revolutionary, but when combined with slower home price appreciation, it creates real breathing room for buyers.
I’ve talked to enough people in the industry to know this matters. A half-point drop in rates can dramatically improve purchasing power, especially for first-time buyers who’ve been priced out for years.
Homebuyer momentum is building thanks to improving affordability and more choices in inventory.
– Industry economist
Inventory: The Other Half of the Equation
Rates get all the headlines, but inventory might actually be the bigger story right now. For years, sellers sat tight—locked into ultra-low rates from the pandemic era. Why sell and buy something more expensive at double the interest rate?
That’s starting to change. More homeowners are listing their properties, giving buyers actual options for the first time in ages. It’s still not a buyer’s paradise by historical standards, but it’s a massive improvement from the desperate bidding wars of 2021-2022.
When you combine more inventory with stable rates and moderating prices, you get exactly what we’re seeing: increased contract activity.
What This Means for Different Market Participants
Not everyone experiences these shifts the same way. Let’s break down what this surge might mean for various players in the housing game.
For Potential Buyers
If you’ve been waiting for better conditions, this might be your signal. More inventory means less competition, and rates aren’t likely to drop dramatically lower anytime soon. Getting in now could position you well before any renewed frenzy pushes prices higher.
That said, don’t rush blindly. The market still favors preparation—strong credit, solid down payment, and realistic expectations about what you can afford.
For Current Homeowners
Sellers are finally getting some pricing power back. Multiple offers aren’t universal yet, but homes in desirable areas are moving faster than they were six months ago.
If you’ve been considering selling to upgrade or downsize, the improving conditions might make now an attractive time. Just remember that you’ll be buying in the same market—rates affect everyone.
For Real Estate Investors
Property investors have been cautious lately, and for good reason. But rising sales activity often signals strengthening fundamentals. Areas with growing buyer interest tend to see better rental demand and price appreciation over time.
Perhaps the most interesting opportunities lie in markets that have lagged but are now showing strong pending sales growth. These could represent the next wave of appreciation.
Looking Ahead to 2026
Here’s where things get really intriguing. Analysts are starting to project meaningful improvement for next year, though opinions vary widely.
Some see modest growth in sales volume. Others are much more optimistic, pointing to continued rate stabilization and growing inventory as catalysts for a stronger recovery.
What seems clear is that the worst of the affordability crisis might be behind us. Prices aren’t crashing, but they’re growing at a much more sustainable pace. Combined with stable employment and demographic demand from millennials entering prime home-buying years, the setup looks reasonably positive.
Of course, nothing is guaranteed. Economic surprises, policy changes, or shifts in consumer confidence could alter the trajectory. But based on current trends, gradual improvement feels like the most likely scenario.
Historical Context: How Unusual Is This?
To really appreciate this moment, it’s worth remembering where we’ve been. The pandemic housing boom created distortions that took years to unwind. Record-low rates fueled unprecedented price growth, followed by the sharpest rate hiking cycle in decades.
Many markets essentially froze in 2023-2024 as buyers and sellers played a waiting game. The fact that we’re now seeing consistent monthly gains—without the frenzy of zero percent rates—actually feels healthier in some ways.
It’s not the wild boom of 2021, but it’s also not the stagnation of last year. It’s something more balanced, more sustainable.
The Psychology of Housing Markets
One aspect that often gets overlooked is the psychological component. Housing decisions are deeply emotional. When people see others starting to buy again, it creates momentum. FOMO isn’t just for stocks—it works in real estate too.
These improving pending sales numbers could trigger exactly that kind of virtuous cycle. As more contracts get signed and close successfully, confidence spreads. Sellers become more willing to list. Buyers feel less urgency to wait.
We’ve seen this movie before, both in positive and negative directions. The question now is whether this momentum can build into something more substantial.
Potential Risks to Watch
Balance requires acknowledging potential headwinds. Employment trends remain crucial—if the job market weakens significantly, housing demand would suffer regardless of rates.
Geopolitical events or financial market turmoil could push rates higher unexpectedly. And while inventory is improving, we’re still well below historical norms in many areas.
Perhaps most importantly, affordability remains stretched by historical standards. Even with recent improvements, buying a home requires substantial income in most markets.
Final Thoughts
The November pending sales report feels like a genuine inflection point. Four straight months of gains, broad regional strength, improving fundamentals—the pieces are aligning for a more active housing market.
Whether you’re thinking about buying, selling, or investing, these developments deserve attention. The market isn’t roaring back to pandemic levels, but it appears to be finding its footing.
In my experience watching these cycles, gradual improvements like this often lay the groundwork for stronger moves later. The housing market rarely turns on a dime—it builds momentum slowly, then can surprise with its strength.
Whatever your situation, staying informed about these shifting conditions matters. Because when the market starts moving again, opportunities—and risks—tend to appear quickly.
The bottom line? After years of challenges, the U.S. housing market is showing real signs of life. Pending sales at 33-month highs aren’t just a statistic—they represent actual people making big life decisions again. And that, more than anything, suggests better days might be ahead.
