A gentle downward nudge in mortgage rates appears to have nudged more prospective homeowners into action in August. According to Melissa Dittmann Tracey, the National Association of REALTORS® observed a 4 percent monthly increase in contract signings—a key forward-looking gauge—and an almost 3.8 percent gain from the same month last year (Tracey, 2025). With rates inching below 6.5%, the report suggests growing buyer confidence may translate into stronger closings through the fall.

Regionally, the Midwest stood out as the brightest spot, with contract activity rising 8.7 percent from July and 6.7 percent year-over-year, outperforming other regions. Meanwhile, mortgage applications nationwide were up 18 percent compared to a year earlier, further signaling momentum for the months ahead (Tracey, 2025).

The August rebound offers a refreshing contrast to much of this summer’s sluggish performance in housing. Falling borrowing costs seem to be unlocking pent-up demand—though it remains to be seen whether supply constraints or affordability pressures will temper the follow-through into closed sales. One particularly interesting thread is the Midwest’s relative strength: its lower home-price baselines and affordability advantage could be amplifying the impact of modest rate declines in that region.

However, a caveat is warranted: pending contract activity does not always result in completed transactions. Market obstacles like inspection issues, appraisals, or financing hiccups still lurk. That said, this late-summer bump may mark a turning point if it carries into the traditionally active fall season.

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Source: 
Late Summer Surge: More Buyers Went Under Contract in August by Melissa Dittmann Tracey, REALTOR® Magazine, September 29, 2025.
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