Pending home sales in July fell to their slowest pace since January as mortgage rates hit their highest level of the year, the National Association of REALTORS® reported.
Month over month, contract signings were down 2.3%, while they were down 2.2% year over year.
“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” NAR Chief Economist Lawrence Yun said. “Home prices are at record highs, so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations.”
Sales were down in all regions on a monthly basis and down on an annual basis in the Northeast, South and West but up in the Midwest.
Of the 50 metro areas surveyed by NAR, several stood out for year-over-year gains in pending sales. Here are the top five markets:
- Virginia Beach-Chesapeake-Norfolk, VA-NC (up 17.2%)
- San Antonio-New Braunfels, TX (up 11.8%)
- Cincinnati, OH-KY-IN (up 6.2%)
- Pittsburgh (up 3.7%)
- Miami-Fort Lauderdale-West Palm Beach (up 2.4%)
“Job gains should bring more buyers into the market, especially if mortgage rates stabilize or decline, though that impact takes time to show up,” Yun said. “Right now, pending contracts are 30% below their pre-pandemic 2019 level, while payroll employment is 5% above. That gap points to sizable pent-up demand that should be unleashed in the coming years as more supply reaches the market and affordability improves.”
