Pending Home Sales Reversed In July

Pending home sales slipped last month, overriding a surprise June uptick.

NAR’s Pending Home Sales Index fell by 5.5% month-over-month to a reading of 70.2 in July, its lowest level on record. An index of 100 is equal to the level of contract activity in 2001, when NAR began tracking this data.

Year-over-year, sales were down 8.5%.

This is a far bigger drop than predicted by economists, reflecting Americans’ ongoing reservations about making purchases while prices are at record highs and rates remain elevated.

“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.”

All four regions posted month-over-month losses, while only the Northeast experienced gains on an annual basis. Yun noted that New England has performed better than other regions in recent months.

Other data has suggested relief may be coming for homebuyers and the market at large. Recent ATTOM data found that residential lending activity spiked in Q2 2024 compared to Q1.

But many potential buyers are waiting out both the presidential election and future Fed decisions about rates before venturing into the market, Yun suggested.

“Current lower, falling mortgage rates will no doubt bring buyers into the market,” he said.

Analysts expect the Central Bank to cut rates next month.