US Pending Home Sales Stick Near Record Lows In July

The choppy performance of the US housing market continued in July with pending home sales falling 0.4% MoM (worse than the 0.2% MoM rise expected). However, this print managed to push sales up a medicore 0.25% YoY (its best annual gain since Nov 2024)…

Source: Bloomberg

Which left the total pending home sales index hovering near record lows…

Source: Bloomberg

Buyers have seen modest relief recently as rates slipped to a four-month low of 6.67% earlier in August, and have stayed close to that in recent weeks.

Financing costs, however, remain double what they were at year-end 2021, a time when many homeowners refinanced their loans to take advantage of lower rates.

“Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant,” NAR Chief Economist Lawrence Yun said in a statement.

Meanwhile, the pace of price growth has at least moderated nationwide, rising by just 0.2% in July from a year ago.

Prices have even fallen in once-hot housing markets in the West and South, where inventory has built up the most.

“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,” Yun said.

Contract signings in the South, the nation’s biggest home-selling region, eased slightly. Pending sales also fell in the Midwest and Northeast, while climbing 3.7% in the West.

The supply of existing homes for sale has reached an almost five-year high, as more people list their homes for sale, but the extra inventory isn’t yet pushing prices down.

Source: Bloomberg

Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.