US pending home sales rise more than expected in September - NAR

US pending home sales rose more than expected in September, according to data released by the National Association of Realtors on Tuesday.

The NAR's monthly index increased 1.5% to 108.7, beating expectations of a 0.9% jump. On the year, pending home sales were up 3.9%.

The NAR's chief economist, Lawrence Yun, said: "Even though home prices are rising faster than income, national buying power has increased by 6% because of better interest rates. Furthermore, we’ve seen increased foot traffic as more buyers are evidently eager searching to become homeowners."

The pending home sales index for the Southeast was up 2.6% to 127.5 in September, while the index for the West was down 1.3% at 95.1. The index for the Northeast fell 0.4% to 93.9 and the gauge for the Midwest was 3.1% higher at 104.4 last month.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The index is volatile but the trend is rising, with pending sales up 6.3% y/y, the biggest gain on this basis in four years.

"The rising trend in the index means that the hit to existing home sales from last year’s capping of state and local tax deductions have now reversed, more or less. The rebound in sales follows the upturn in mortgage demand, which points to new cycle highs for home sales over the next few months. 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."