U.S. pending home sales ticked up in August from a record low, as falling mortgage rates encouraged some buyers to dip a toe into the market.

A measure of contract signings for previously owned homes climbed 0.6% to 70.6 last month, according to data released by the National Association of Realtors Thursday. That came in below the median estimate of economists surveyed by Bloomberg, who had the index rising 1%.

“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” NAR Chief Economist Lawrence Yun said in a prepared statement. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”

Realtors are counting on buyers responding to lower mortgage rates, which recently have fallen further to just above 6%. But would-be buyers have been slow to return to the market, with sales of existing homes falling to a 10-month low in August. And many homeowners with sub-3% mortgage rates on their loans are reluctant to sell, keeping the supply of available homes at roughly three-fourths of 2019 levels.

In one hopeful sign, the share of consumers who said they plan to buy a home in the next six months rose to the highest level in a year in Conference Board survey data this week, helped by the prospect of further interest-rate cuts from the Federal Reserve.

Across the U.S., pending sales rose in the Midwest, South and West, but the Northeast index fell to its lowest point since the start of the pandemic in 2020.

Pending-homes sales tend to be a leading indicator for previously owned homes, because houses typically go under contract a month or two before they’re sold.

(With assistance from Chris Middleton.)

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