Pending-home sales surged 7.5% on a monthly basis in October after falling 2.3% in September, the National Association of REALTORS® reported, citing its Pending Home Sales Index.

Year over year, contract signings were down 1.4%, according to a press release.

“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,” NAR chief economist Lawrence Yun said, noting that October’s strong numbers indicate total existing-home sales in 2021 will exceed six million, representing the best performance in 15 years. “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.”

All four geographic regions saw increases in contract activity, led by the Midwest, which clocked an 11.8% rise from September, and the South, where signed contracts rose 8%. Pending transactions climbed 6.9% in the Northeast and 2.1% in the West.

Compared to last year, the Northeast had the largest drop in the PHSI, with a 10% decrease, followed by the West, with a 6.2% slide. The Midwest and South saw increases of 5.1% and 0.6%, respectively.

“Even as rates increased in October, the housing market remained a competitive sellers’ market,” First American Deputy Chief Economist Odeta Kushi said. “Demand remains high against a very limited number of homes for sale. A high velocity of sales, as indicated by lower days on market, explains a housing market characterized by higher sales and lower inventory.”