U.S. pending home sales rose 0.6% in August, as a big drop in mortgage rates prompted some home buyers to act.

Key Takeaways Pending home sales rose 0.6% in August, bouncing back slightly from the record low they hit in July.Forecasters had expected a 1% increase as falling mortgage rates have improved affordability in recent months.

Contracts to buy U.S. previously owned homes edged up in August from July's record-low level as a drop in mortgage interest rates in anticipation of Federal Reserve benchmark rate cuts provided a modest lift to affordability.