After a long period of sluggish activity, the US housing market is showing renewed signs of life as pending home sales jumped in November 2025 to their highest level in nearly three years. According to the National Association of Realtors (NAR), contract signings were up by 3.3% compared to October 2025 and 2.6% compared to November 2024. While it’s not enough to guarantee that the market is turning a corner, many analysts agree that this surge in numbers could mean that buyer interest is building, which could impact mortgage rates and other market factors.

These figures represent more than a seasonal upturn. For many economists and market watchers, increasing pending home sales can provide an early indication of future closings, rising existing-home sales, and broader improvements in buyer confidence as the housing market transitions into 2026. Whether you’re buying, selling, renting, or investing, knowing what November’s surge in pending home sales could mean for the market is important.

What the Pending Home Sales Index Tells Us

The Pending Home Sales Index (PHSI) is an indicator that looks at contracts that are signed, but not yet closed. Since real estate transactions typically take a month or two to close, these pending figures serve as a valuable early signal of future housing market activity.

Lawrence Yun, NAR’s Chief Economist, highlighted that this November’s increase, the strongest in almost three years, reflects not just seasonal patterns but genuine growth in buyer interest after accounting for typical fluctuations. More buyers signing contracts suggests that people are responding to market conditions rather than just riding seasonal cycles.

All four US regions saw increases in pending sales, marking the first time that this has happened in nearly five years. The West led the monthly gains, climbing sharply, while year-over-year growth was most pronounced in the South. This breadth underscores that the uptick isn’t limited to a few isolated markets but reflects wider shifts in buyer activity.

Mortgage Rates, Affordability, and Buyer Motivation

One of the key drivers behind the increase in pending home sales is the shift in mortgage rates. Although rates are not expected to reach their pandemic-era record lows, interest rates on 30-year fixed mortgages have eased from their recent record highs and now sit near levels that many buyers find more manageable. Lower rates reduce monthly payments and can make owning more attainable compared with a year ago.

Affordability, perhaps the most important factor in the housing market, also improved in the later stages of 2025. Most notably, wage growth outpaced home prices in multiple states. Even though prices remain higher than their pre-pandemic norms, rising incomes have helped ease some pressure, and more choice in inventory has given buyers more options to consider before committing.

Still, many areas continue to face affordability issues. High home prices have kept some buyers on the sidelines, and potential sellers have hesitated to list because they don’t want to give up low-rate mortgages or fear not finding a replacement property. But for buyers ready to act, more favorable borrowing conditions have spurred movement back into contract activity.

How Pending Sales Fit Into Broader Housing Market Trends

The increase in homebuyer activity comes at the end of a year that was marked by moments of optimism and disappointment in the housing market. Existing home sales saw periodic gains followed by stretches of stagnation throughout the year, and home prices continued to set new records in many metro areas despite affordability challenges.

Long-term housing trends have also been shaped by broader economic conditions, including inflationary pressures, labor market dynamics, and fiscal policy shifts that influence borrowing costs and consumer confidence. Even in a slow year overall, the recent momentum in pending sales means that buyers may be responding to conditions that feel more predictable and manageable.

What This Means for Buyers and Sellers

Economists have cautioned that pending sales improvement doesn’t guarantee gains in closed transactions. Still, rising contract activity typically precedes increases in closings, making these figures a useful barometer for housing market health.

For potential homebuyers, an increase in homebuying activity can signal that competition may be increasing, but also that price trends are stabilizing and lenders are offering more attractive terms. Lower rates can broaden purchasing power, especially for first-time buyers or those upgrading to larger homes.

Potential sellers may also interpret the latest news that things are shifting. While an increase in pending home sales might mean that demand exists, sellers also face decisions about timing and pricing. With some markets showing more inventory and others still tight, effective pricing and staging remain critical to capturing buyer interest. Ultimately, the shift means that market conditions aren’t as restrictive as earlier in the year, which is great news for the nation’s real estate outlook.

No matter which side of the closing table you’re hoping to sit on in 2026, the increase in pending sales means that many households are willing to move forward with major financial transactions again. Ideally, this uptick will ripple into other related fields, such as lending, construction, and home services. This sort of far-reaching impact could be great news for the US economy as a whole in 2026.

Are Better Days Ahead?

Pending home sales rising to their highest level in nearly three years suggests an important shift in the U.S. housing market. Fueled by modestly lower mortgage rates, slight improvements in affordability, and broader buyer engagement, contracts signed on existing homes point to building momentum as we move into 2026. Challenges certainly remain, but for the first time in a long time, there is good news in the US housing industry.