U.S. Pending Home Sales Drop In July But Notably Higher Year-Over-Year

(RTTNews) - Pending home sales in the U.S. fell by more than anticipated in the month of July, according to a report released by the National Association of Realtors on Monday, with all regions showing monthly declines in pending sales except for the West.

NAR said its pending home sales index fell by 1.3 percent in July following an unrevised 2.4 percent increase in June. Economists had been expecting pending sales to decrease by about 1 percent.

A pending sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Despite the bigger than expected monthly decrease, NAR noted that the pending home sales index for July is up by 14.4 percent compared to the same month a year ago.


Lawrence Yun, NAR chief economist, said, "Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April."

"The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge," he added. "It is now a question of lending standards and consumers having the necessary confidence to enter the market."

The bigger than expected monthly drop in pending home sales was partly due to a 4.8 percent drop in pending sales in the South.

Pending home sales in the Northeast and the Midwest also fell by 2.0 percent and 0.8 percent, respectively, while pending sales in the West rose by 3.6 percent.


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