U.S. Pending Home Sales Down In July
Rising mortgage interest rates caused pending U.S. home sales to dip in July, but the market still made annual gains, according to the National Association of Realtors (NAR).
The NAR Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 1.3 percent to 109.5 in July, from 110.9 in June. But it was still 6.7 percent higher than it was in July 2012 when it was 102.6.
The index has seen year-over-year increases for the last 27 months, according to NAR.
Higher mortgage interest rates have impacted contract signings in the Northeastern and Western U.S. in particular, according to Lawrence Yun, chief economist at NAR. The PHSI in the Northeast fell 6.5 percent to 81.5 in July, but is 3.3 percent higher than a year ago.
“The modest decline in sales is not yet concerning, and contract activity remains elevated with the South and Midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West,” Yun said in a statement. “More homes clearly need to (be) built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.”
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