Pending home sales increased 7.5% in October after suffering a decline in September, the National Association of Realtors announced Monday.

However, year-to-year sales dropped 1.4%.

NAR Chief Economist Lawrence Yun said fast-rising rents and the anticipated increase in mortgage rates are encouraging those with strong financial footing to buy homes.

"This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low,” Yun added.

Yun said the gains made in October will assure that existing home sales in 2021 exceed 6 million and “will shape up to be the best performance in 15 years.” Yun also anticipated home prices to gently rise over the next several months and for demand to be milder as mortgage rates increase.

Contract signings were strongest in the Midwest and the South as they rose 11.8% and 8%, respectively, as the Northeast saw a 6.9% rise.

A home sale is listed as pending when a contract has been signed but the deal has not closed.

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