Pending home sales retreat
Pending home sales in July retreated 5.5%, according to the National Association of Realtors. All four U.S. regions posted monthly losses in transactions. Year-over-year, the Northeast rose while the Midwest, South and West registered declines.
The Pending Home Sales Index (PHSI)—a forward-looking indicator of home sales based on contract signings–slipped to 70.2 in July, the lowest reading since the index began tracking in 2001. Year over year, pending transactions were down 8.5%. An index of 100 is equal to the level of contract activity in 2001.
“A sales recovery did not occur in midsummer,” said NAR Chief Economist Lawrence Yun. “The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.”
The Northeast PHSI waned 1.4% from last month to 64.6, an increase of 2.4% from July 2023. The Midwest index reduced 7.8% to 67.8 in July, down 11.4% from one year ago.
The South PHSI sank 6.5% to 83.5 in July, falling 11.5% from the prior year. The West index shrunk 3.8% in July to 56.2, down 6.0% from July 2023.
“In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months,” added Yun. “Current lower, falling mortgage rates will no doubt bring buyers into market.”