Kevin Sears President | Official website
Pending home sales in the United States fell by 0.4% in July compared to June, according to data released by the National Association of Realtors (NAR). On a year-over-year basis, pending home sales rose by 0.7%. The NAR Pending Home Sales report provides insight into the number of homes under contract but not yet closed.
Regionally, the Northeast and Midwest experienced declines in pending sales from June to July, while activity remained nearly unchanged in the South and increased in the West. Over the past year, pending sales dropped in both the Northeast and West but saw gains in the Midwest and South.
The REALTORS Confidence Index survey for July indicates that 16% of NAR members expect an increase in buyer traffic over the next three months, a figure unchanged from last year. Meanwhile, 21% anticipate more seller traffic, up from 17% a year ago.
NAR Chief Economist Lawrence Yun commented on current market conditions: "Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant. Buying a home is often the most expensive purchase people will make in their lives. This means that going under contract is not a decision home buyers make quickly. Instead, people take their time to ensure the timing and home are right for them."
Yun added: "Rising mortgage applications for home purchase are an early indicator of more serious buyers in the marketplace, though many have not yet committed to a pending contract. The Federal Reserve signaling that they may enact a lower interest rate policy should steadily enlarge the pool of eligible home buyers in the upcoming months."
In terms of regional figures for July:
- The Northeast recorded a 0.6% decrease month-over-month and also declined 0.6% compared to last year.
- The Midwest saw a 4.0% drop month-over-month but had a 1.3% gain year-over-year.
- The South was down slightly by 0.1% month-over-month while rising by 1.8% over last year.
- The West posted a monthly increase of 3.7%, though it was down by 1.9% on an annual basis.
The Pending Home Sales Index (PHSI), which serves as an advance indicator based on contract signings covering about 40% of multiple listing service data each month, uses an index value where 100 represents contract activity levels seen during 2001.
According to NAR’s explanation of methodology, there can be variation between when contracts are signed and when sales close due to factors such as mortgage financing issues or inspection problems.
The National Association of Realtors is involved across residential and commercial real estate sectors nationwide and offers consumer guides at facts.realtor about navigating transactions including written agreements and compensation negotiations.
Existing-home sales data for August will be released on September 23; updated Pending Home Sales Index figures are expected September 29 at https://www.nar.realtor/research-and-statistics/press-room/news-release-schedule.
