The U.S. real estate market experienced a surprising uptick in July as pending home sales rose at the fastest pace seen in seven months, defying expectations of a slowdown due to climbing mortgage rates.

Data released by the National Association of Realtors revealed a 0.9% increase in signed contracts for pre-owned homes in July, contrary to the 0.6% decline predicted by economists surveyed by Refinitiv.

According to NAR Chief Economist, Lawrence Yun, this small but significant rise in contract signings suggests potential for further growth. Despite many prospective buyers losing out on multiple offers due to limited inventory and escalating mortgage rates, job growth is expanding the pool of potential home buyers.

Pending home sales reports are often viewed as a leading indicator of existing-home sales, as houses usually go under contract one or two months before they are sold. Sales increased in the Northeast and Midwest but decreased in the South and West. Year-over-year, US home purchases were down 14.8% on an unadjusted basis.

Contrary to reports suggesting a decline in the housing market, pending home sales significantly increased by 9.8% in July, marking an improvement from June’s revised figure. Additionally, mortgage applications, which had previously plummeted by 4.2% to a 50-year low, have started to rebound, with a 2.3% increase last week. These statistics indicate that the housing market may be demonstrating signs of recovery and resilience.

Read more at Bloomberg.