Renee Mccharen

U.S. Pending Home Sales Index

Explore the latest National Association of Realtors® Pending Home Sales Index, tracking contract activity across the United States. This report provides current and historical data on national housing demand, revealing forward-looking market trends that signal future movements in home sales, pricing, and inventory. View the full PDF for a deeper analysis of how today’s numbers compare to long-term benchmarks and past market cycles.

NAR Pending Home Sales Index – October 29, 2025 Update

The National Association of Realtors® (NAR) has released its September 2025 Pending Home Sales Index (PHS), offering one of the most critical forward-looking indicators of U.S. housing demand. The data confirms that the national housing market continues to operate in a demand recession, with contract activity remaining deeply below historical norms despite slight year-over-year improvement.

For September 2025, the Pending Home Sales Index registered 67.2, down sharply from 76.0 in August, representing an 11.6% month-over-month drop—the steepest decline recorded so far this year. While the index posted a modest 1.5% increase year-over-year, the broader picture remains weak. The historical average PHS reading for September is 89.1, indicating that current contract activity is running 24.6% below long-term trends.

First Nine Months of 2025: Demand Remains Stagnant

From January through September 2025, cumulative pending sales activity totaled 699.5, which is:

1.5% lower than the same period in 2024

24.6% below the long-term historical average of 927.7

This marks the third consecutive year where national contract activity has operated well below trend levels, with no meaningful signs of a demand breakout.

Contract activity initially showed improvement early in the year—rising from 57.0 in January to 89.9 in March—but has steadily deteriorated since April. After modest stabilization over the summer, the September index experienced a significant pullback, highlighting the fragile nature of the market’s demand structure.

Historical Context: A Prolonged Departure from Normalcy

Historically, September is a transition month where contract activity moderates but remains strong relative to the rest of the year. During the growth cycles of 2004–2006, September readings consistently ranged from 120 to 140. Even during the post-recession recovery of 2015–2019, the index averaged over 115 in September. Today’s reading of 67.2 represents one of the lowest September levels in more than two decades, rivaling the contractionary lows of the 2008–2009 financial crisis.

Market Behavior: Stalled Momentum and Rising Risk

The September decline stands out as a significant departure from the relative stability seen over the summer. After several months of minor fluctuations in the low single digits, the market has now shifted back into negative territory. This downturn suggests that buyers are retreating despite stable mortgage rates, indicating that affordability constraints—not rate volatility—remain the primary barrier to demand.

Key Indicators:

Month-over-Month Change: -11.6%

Year-over-Year Change: +1.5%

Difference from Historical Average: -24.6%

Cumulative 2025 Contract Activity: 699.5 vs. historical average of 927.7

Affordability, Inflation, and Consumer Sentiment

Mortgage rates have stabilized compared to the peaks of 2023, but elevated home prices and persistent inflation have eroded consumer purchasing power. According to NAR, nearly 75% of metro markets remain unaffordable to the average household. Even with a slight year-over-year improvement, today’s index level shows that contract activity is still constrained by economic headwinds and buyer hesitancy.

Limited inventory in entry-level price points has further intensified the affordability gap, while supply increases at higher price tiers have not translated into broader contract growth.

Forward-Looking Implications

Because the Pending Home Sales Index leads existing home sales by one to two months, today’s reading suggests that closed sales activity for late Q4 2025 will likely weaken further. Unless there is a meaningful improvement in affordability or a shift in macroeconomic policy, contract activity is expected to remain trapped at historically low levels well into early 2026.

National housing demand remains more than 30% below peak-cycle norms, and there are currently no indications of a demand rebound on the horizon.

Long-Term Perspective

Over the past 20 years, the median September index level has been 90.8, underscoring the severity of today’s demand shortfall. The fact that the index has remained below 80 for 18 of the past 24 months reinforces the narrative of an extended affordability-driven housing recession.

Takeaway

The September 2025 Pending Home Sales Index confirms that the national housing market remains in a prolonged period of demand contraction. Despite a slight year-over-year improvement, contract activity continues to operate well below historical norms, with affordability challenges preventing buyers from returning to the market in meaningful numbers. Until economic conditions shift or home prices adjust further, the housing market will remain stalled—characterized not by collapse, but by chronic stagnation.

Copyright ©2025“Pending Home Sales.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. May 30, 2025. https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales

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NAR Pending Home Sales Index – October 29, 2025 Update

First Nine Months of 2025: Demand Remains Stagnant

From January through September 2025, cumulative pending sales activity totaled 699.5, which is:

1.5% lower than the same period in 2024

24.6% below the long-term historical average of 927.7

This marks the third consecutive year where national contract activity has operated well below trend levels, with no meaningful signs of a demand breakout.

Historical Context: A Prolonged Departure from Normalcy

Market Behavior: Stalled Momentum and Rising Risk

Key Indicators:

Month-over-Month Change: -11.6%

Year-over-Year Change: +1.5%

Difference from Historical Average: -24.6%

Cumulative 2025 Contract Activity: 699.5 vs. historical average of 927.7

Affordability, Inflation, and Consumer Sentiment

Limited inventory in entry-level price points has further intensified the affordability gap, while supply increases at higher price tiers have not translated into broader contract growth.

Forward-Looking Implications

National housing demand remains more than 30% below peak-cycle norms, and there are currently no indications of a demand rebound on the horizon.

Long-Term Perspective

Takeaway

U.S. Pending Home Sales Index

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U.S. Pending Home Sales Index