Pending home sales show slight annual gain in July

"Buying a home is often the most expensive purchase people will make in their lives. This means that going under contract is not a decision homebuyers make quickly, Lawrence Yun, the chief economist at NAR, said in a statement. Instead, people take their time to ensure the timing and home are right for them. This uptick in inventory and slower pace of home sales is a decided shift from the initial post-pandemic seller's market, but economists are hesitant to call it a true buyer's market."

"Sellers are feeling stuck because they are not getting the offers they want, Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. Bright MLS's recent analysis found that a key reason sellers are delisting their home is because their price expectations are not being met. Buyers are feeling stuck because, although there is more inventory, home prices are still high and affordability is still a hurdle."

"Regionally, the Pending Home Sales Index was down month-over-month in the Northeast (64.3), Midwest (70.2) and the South (86.1), with decreases of -0.6%, -4.0%, and -0.1%, respectively. The West saw pending home sales rise on a monthly basis in July jumping 3.7% to a reading of 56.3. On a yearly basis, pending home sales fell in the Northeast (-0.6%), and the West (-1.9%), but rose in the Midwest (1.3%) and South (1.8%)."

An index reading of 100 equals contract activity in 2001. Buying a home remains the most expensive purchase, so going under contract is a deliberate decision and buyers take time to ensure timing and fit. Inventory has increased and the pace of home sales has slowed, signaling a shift from the post-pandemic seller's market, yet high prices and affordability constraints prevent a full transition to a buyer's market. Sellers delist when price expectations are unmet, while buyers remain constrained by affordability. Pending Home Sales fell in the Northeast, Midwest and South but rose in the West. Realtor confidence shows unchanged buyer-traffic expectations and higher seller-traffic expectations. Analysts anticipate a Fed rate cut in September, with differing views on housing impact.

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