The numbers: U.S. pending home sales rose for the second straight month in September, helped by lower mortgage rates, a trade group said Tuesday.
The National Association of Realtors said pending home sales climbed 1.5%. Economists expected a 0.7% gain, according to a survey by Econoday.
Compared to 12 months ago, sales jumped 3.9%. In August, sales rose a revised 1.4%.
The index captures transactions where a contract has been signed, but the home sale has not yet closed.
What happened: The four major regions were split last month, as the Midwest and South showed gains but the Northeast and West reported declines.
The Case-Shiller home-price report also released Tuesday showed a drop in house prices in August.
Big picture: The Federal Reserve’s two interest rate cuts this year is starting to impact the housing sector. Low mortgage rates played a role in the two straight months of gains in pending home sales, said Lawrence Yun, the NAR’s chief economist, in a statement. He said that national buying power has increased by 6% because of better interest rates. Contract signings would be higher if more housing was available, he added.
What are they saying? “Housing is the brightest spot in the economy right now, but it is just too small to make a meaningful difference to the overall macro picture,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction: Stocks closed lower Tuesday with the Dow Jones Industrial Average DJIA, -0.07% down 19.26 points to 27.071 while the S&P 500 index SPX, -0.08% was down 2.53 points to 3,036.