Contract signings climbed 7.5% in October, and home sales for 2021 are on pace to hit a 15-year high, the National Association of REALTORS® reported Monday. Pending home sales rebounded after a decline in September.

Despite rising mortgage rates, home buyers appear undeterred by higher financing costs and home prices. Contract activity increased month over month in all four major regions of the U.S. NAR’s Pending Home Sales Index is a forward-looking indicator of home sales based on contract signings.

“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” says Lawrence Yun, NAR’s chief economist. “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 notes that the gain in October assures that total existing-home sales in 2021 will exceed 6 million. That will mark the top performance in home sales in 15 years, Yun says.

He does forecast, however, home prices will increase at a “gentler pace” over the next several months and expects demand to be milder as mortgage rates increase. The 30-year fixed-rate mortgage averaged 3.10% last week, up from a 2.72% average a year ago, Freddie Mac reports.

Last month, contract signings increased at the strongest pace in the Midwest and South regions. The Northeast increased 6.9% in October, but contract signings are still down 10% from a year ago. The Midwest saw contract signings climb 11.8% in October; pending home sales are up 5.1% from a year ago.

More brick-and-mortar retail is needed. Store openings are outnumbering closings for the first time in four years, according to an analysis of more than 900 chains by the IHL Group, a research firm.

The largest amount of growth is coming from mass merchants, food, drugs and pharmacy, and convenience chains, The Wall Street Journal reports.

E-commerce is also driving a lot of the increase in the physical footprints of stores as a greater number of online and store experiences become more closely linked. Digital businesses are relying on physical stores for easier shipping or for customer pickup or returns.

E-commerce had been blamed for physical stores closing. The nation’s largest chains closed 6,573 more stores than they opened last year.

Property owners have been offering incentives to win more tenants back. Companies took notice. For example, company officials with the clothing company Levi Strauss & Co. told The Wall Street Journal that their company is securing space for prices 15% less than pre-pandemic levels. They plan to open 100 U.S. stores over the next five years.

“The majority of consumers like to engage with us in our stores,” Harmit Singh, Levi’s finance chief, told The Wall Street Journal.

Dick’s Sporting Goods is opening more than 800 stores under its House of Sport, Public Lands, and Golf Galaxy brands that include more experience activities within them, such as batting cages, rock climbing walls, and putting greens.

Also, digital-first companies want more of a physical footprint. Amazon is planning to open its own department stores.

Overall, retailers are opening 4,361 more brick-and-mortar stores in 2021 than they closed.

“It’s not like it’s stores against e-commerce anymore” Brendan Witcher, a Forrester Research principal analyst, told The Wall Street Journal. “They play an integral role in supporting each other. The old story that stores are dead is simply not true.”

This winter is expected to be unseasonably hot for the housing market.

“Compared to other past winter seasons, this winter season’s sales activity will be stronger,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.”

The momentum from the last few months is expected to continue. From March through October, homes have been selling faster than they traditionally do.

“Although there are fewer buyers in the winter months than in the competitive spring and summer period, all signs suggest that housing demand remains high,” says Danielle Hale, realtor.com®’s chief economist.

Housing inventories remain tight. The inventory of unsold homes fell by 12% in October compared to last year, according to NAR data. A limited supply of homes for sale is an ongoing issue for the housing market against continued strong demand among potential home buyers.

Homes are selling fast. Eighty-two percent of homes sold in October were on the market for less than a month, according to NAR data.

“Many sellers should not feel the need to wait until spring, especially in high-demand areas,” Kelly Mangold, principal at RCLCO Real Estate Consulting, told realtor.com®.

Buyers may feel more rushed ad may try to qualify for historically low mortgage rates ahead of any more rises. The 30-year fixed-rate mortgage averaged 3.10% last week, according to Freddie Mac. NAR is forecasting that rates will increase to 3.50% by the middle of 2022.

Home price increases may be leveling off somewhat, too. “The days of fast price gains are over,” Yun says. “There will be few pockets of the market where bidding wars do occur, but sellers should expect much less than what was occurring the past 12 months. Home prices generally will be higher price compared to one year ago, but maybe a bit lower compared to what occurred in the summer.”

Holiday decorating is in full swing, and as homeowners deck their halls, they may want to also use the festivities as an excuse to inspect several out-of-sight ares of their home.

Groundworks, a basement and foundations firm, offers up tips to spot needed repairs in the home while also hanging your holiday decor. Here are the top seven home issues they suggest looking for:

Electrical outlets

Is a plug no longer working? Outdoor outlets are exposed to the elements and can become damaged. A ground fault circuit interrupter may have been tripped. Take precautions if you find any loose connections or exposed wiring.

Circuit breakers

While installing an outdoor light display, homeowners may discover problems with the home’s electrical system or circuit breaker box. “Some homeowners may only check out their electrical panel if they accidentally throw a breaker,” GroundWorks says. “However, proactive homeowners may want to look at their breaker box before installing holiday lights. You may discover that you need a diagram of which circuits are connected to which outlets or appliances. This can help you avoid overloading a single circuit.” LED Christmas lights tend to use less electricity and may help avoid blown fuses.

Overgrown shrubs

Plants should be about two feet from your house to protect your foundation. Tend to any overgrown plants while hanging holiday lights, or make a note on your calendar to do so in March or April. “If you have overgrown evergreens, you can also give them a light trim around the holidays and use that greenery for home decorations,” Groundworks says.

The roof or gutters

If you’re on a ladder to hang Christmas lights, be sure to take a look at the roof and gutters. Are the gutters clogged? Is rainwater pooling right next to the foundation? Are any shingles missing on your roof? Spot existing damage and avoid creating more problems by using light clips on the edge of your gutter while hanging Christmas lights, GroundWorks suggests.

Chimney

Take a close look at the chimney. Does it look like it’s tilting or starting to separate from the house? This could be a sign of foundation issues. To test it, Groundworks suggests, hold a string with a small weight from the top edge of the house. The string will always fall straight down. Compare that to the structure to determine whether there is a tilt to any portion of the home, including the chimney. A tilting chimney may show a visible gap where it is pulling away from the remainder of the house, Groundworks says. A foundation expert may need to identify the problems and explore the best ways to fix them.

Pest damage

You may also spot damage from pests. “Along the eaves, you could find woodpecker holes or wasp nests,” Groundworks says. “Where the house meets the ground, you could find signs of termites or ants.”

Siding damage or wood rot

Look for any signs of deterioration, damage, or wood rot on your siding or window frames. If you find any, your home could be vulnerable to water damage. “In the warmer months, your home could be unprotected from heavy rains, resulting in flooding or moisture in your basement or crawl space,” Groundworks warns. “As the weather turns cold, the damaged siding could allow water inside the walls, cracking the concrete when it freezes.”

Glass is joining the list of building materials in short supply. A range of industries, including shower door manufacturers and window installers, are reporting glass shortages.

Nearly two-thirds of home builders said that windows are their biggest material shortage, according to a recent survey from John Burns Real Estate Consulting. Rounding out the top four in additional shortages are umber, engineered wood products, and concrete, according to the survey.

Window delays could range from four to 15 weeks, though some are stretching even up to 45 weeks, according to John Burns Real Estate Consulting.

An international logistics backlog is leading to shortages of glass and other materials, experts say. Many glass manufacturers have moved operations overseas. China, Mexico, and India have traditionally exported the most glass and stone to the U.S. The glass shortage has especially affected the supply of glass jars and bottles, driving up the price of some grocery products lately.

Read more: Builders Reporting Material Shortages Hit Record High and Builders Seek Alternative Materials for Faster Construction

©National Association of REALTORS®
Reprinted with permission

Taking notice of the increased appetite for U.S. real estate, investors are building up their portfolios of properties looking to cash in on the higher housing and rental prices. Investors purchased a record $64 billion of homes in the third quarter.

Single-family homes comprised nearly three-quarters of investor purchases in the quarter, an all-time high, Redfin reports.

In October alone, investors made up 17% of buyers, up from 14% a year earlier, the National Association of REALTORS® reported in its latest existing-home sales report. All-cash buyers, the category that investors tend to land in, accounted for 24% of home sale purchases last month.

Overall, investors purchased a record high of 90,215 homes in the third quarter, up from 80.2% a year earlier. That is the second-largest year-over-year gain on record, Redfin reports.

“Increasing home prices fueled by an intense housing shortage have created opportunities for investors to reap big profits,” says Sheharyar Bokhari, Redfin’s senior economist. “Those same factors have pushed more Americans to rent, which also creates opportunities for investors because investors typically turn the homes they purchase into rentals and can now charge higher rents.”

Average monthly rents climbed 10.7% annually in September. Median home prices increased 13.1% in October year over year to $353,900, according to NAR.

Where Investors Are Targeting

Atlanta had the highest share of homes sold in the third quarter that were purchased by investors, the highest share of the 40 U.S. metro areas that Redfin tracked. Rounding out the top five are Phoenix (31.7%); Charlotte, N.C. (31.5%); Jacksonville, Fla. (28.3%); and Miami (28.1%).