How do I use pending sales data to predict where prices are heading?

What does a pending sale actually tell you about the market?

A pending sale is a contract that has been signed but has not yet closed. The buyer and seller have agreed on a price, the option period may still be running, and the transaction is working through inspections, financing and title. Because the contract is already in place, a pending sale reflects a decision that was made days or weeks before it shows up in closed-sale data.

That timing gap is the reason pending sales matter as a forward signal. Closed-sale prices, which are the numbers most people focus on, describe what buyers agreed to pay one to two months earlier. Pending sales describe what buyers are agreeing to pay right now. Watching both together gives you a more complete picture than either one alone.

In August 2026, the Greater Houston area recorded 7,939 pending single-family home sales. That figure sat alongside 38,947 active listings and 7,100 closed sales for the same month. Comparing those three numbers side by side is where the analysis begins.

How do you read pending sales alongside inventory and closed sales?

The ratio that matters most is pending sales compared to active listings. When pending sales are high relative to the number of homes available, buyers are absorbing inventory quickly. That kind of absorption tends to put upward pressure on prices over the following one to two months, as sellers gain negotiating leverage. When pending sales are low relative to active listings, homes sit longer and sellers often have to adjust their expectations.

In August 2026, Houston had 5.3 months of single-family inventory. Months of inventory is calculated from the pace of closed sales, not pending sales, so it is a slightly lagging measure. Pending sales give you a preview of whether that inventory number is likely to rise or fall next month. With 7,939 pending sales against 38,947 active listings in August 2026, roughly one in every five listed homes was already under contract, which is a useful benchmark to track month over month.

Days on market adds another layer. In August 2026, single-family homes in Houston spent an average of 54 days on the market, up from 52 days a year earlier. When days on market rises at the same time pending sales fall, that combination signals softening demand. When days on market falls while pending sales rise, the opposite is true. Neither number alone tells the full story; the direction of change in both, read together, is what matters.

Closed-sale prices in August 2026 showed the market in a holding pattern. The median single-family price was $330,000, down $5,000 from a year earlier. The average price for existing single-family homes declined 1.0 percent to $433,016. Those closed-sale figures reflect contracts that were signed weeks before August ended. The pending sales count from that same month will show up in September and October closings, so watching how pending activity moves from month to month gives you a preview of where those closed-price figures are heading.

What other data points sharpen the picture that pending sales start?

Pending sales work most effectively when you read them alongside several supporting data points rather than in isolation.

Sales by price segment tell you whether demand is shifting up or down the price range. In August 2026, single-family sales in the $1 to $99,999 range increased 11.1 percent year over year, while sales in the $250,000 to $499,999 range fell 13.7 percent and sales in the $500,000 to $999,999 range fell 16.5 percent. If pending sales are concentrated in lower price ranges while higher price ranges slow, that pattern tends to pull the overall median price down even if the lower end is active. Watching which segments are generating pending contracts, not just the total count, tells you more about where prices are likely to land.

Year-over-year comparisons matter more than month-over-month in Houston because the market has seasonal patterns. August 2026 total property sales across all types were down 10.2 percent from August 2025, and total dollar volume fell 8.8 percent to approximately $3.5 billion. Pending sales declined 3.5 percent for single-family homes and 8.0 percent for townhomes and condominiums compared to a year earlier. Those year-over-year declines in pending activity are consistent with the closed-price softness already visible in the data.

The townhome and condominium segment illustrates how pending sales can signal segment-specific pressure. In August 2026, pending sales for that category fell 8.0 percent, from 439 to 404, while months of inventory rose from 8.1 to 8.8 months. The median price for that segment fell 7.1 percent to $195,000. The pending-sales decline preceded and is consistent with that price movement.

The Texas Real Estate Research Center at Texas A&M publishes housing activity data drawn from over 50 listing systems across the state, covering single-family, condominium and townhouse properties in both new and existing construction sold through those systems. That data is released for the Houston metro area on or near the 40th calendar day after month end, which means there is always a lag between when market conditions shift and when the published numbers reflect that shift. Pending sales, because they are captured closer to real time, help bridge that gap.

What are the limits of using pending sales as a predictive tool?

Pending sales are an early indicator, not a guarantee. A contract can fall through during the option period, during financing, or at any point before closing. When a buyer terminates inside the option period, the home goes back to active status and that pending sale never becomes a closed transaction. A spike in pending sales that is followed by a high rate of contract cancellations will not produce the price movement you might expect.

The data also has coverage limits worth understanding. The Texas Real Estate Research Center notes that new home sales negotiated directly between a builder and buyer outside of listing systems are not included in the housing activity dataset. Existing home sales negotiated outside of those systems are also excluded. In a market like Houston, where new construction is a significant share of overall activity, that exclusion means pending-sales counts from listing data alone do not capture the full picture of buyer demand.

The FHFA House Price Index measures changes in single-family home values using a repeat-sales methodology, tracking the same properties over time. That index is released on a monthly and quarterly schedule, with the most recent monthly release covering data through July 2026 as of late September 2026. Because the FHFA index is based on mortgage transactions acquired or securitized by the Enterprises, it also has coverage limits: cash transactions and loans outside that universe are not reflected. Pending sales data from listing systems and the FHFA index measure related but not identical things, and using both together gives a more complete view than either alone.

Finally, pending sales reflect buyer decisions made under current financing conditions. In August 2026, the average 30-year fixed mortgage rate was 6.67 percent, up from 6.59 percent a year earlier. A shift in financing conditions between the time a contract is signed and the time it is scheduled to close can affect whether that pending sale becomes a closed sale and at what price. There is no guarantee that a high pending-sales count translates directly into higher closed prices if financing conditions tighten in the interim.

Reading pending sales well means treating them as one input in a set of signals, not as a standalone forecast. The direction of change in pending sales, combined with inventory levels, days on market, price-segment breakdowns and financing conditions, gives you a more reliable read on where the market is heading than any single number can. If you want to work through what the current data means for a specific home, neighborhood or price range, talk to us to find the right option for your circumstances.

Common follow-up questions

Sources

• Texas Real Estate Research Center (Texas A&M) - Housing Activity
• HAR - Monthly Housing Update and MLS Sales Activity
• FHFA - House Price Index

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