Climbing for the second consecutive month, pending home sales increased 0.9% in July, according to the National Association of Realtors (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 0.9% to 77.6 in July. Year over year, pending transactions fell by 14%.
"The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers," says NAR chief economist Lawrence Yun. "Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many."
Regionally, the Northeast and Midwest posted monthly losses, while sales in the South and West grew. All four U.S. regions saw year-over-year declines in transactions.
The Northeast PHSI shrank 5.8% from last month to 63.2, a decrease of 20.2% from July 2022, while the Midwest index fell 0.4% to 77.5 in July, down 16.0% from one year ago.
The South PHSI lifted 2% to 95.3 in July, declining 10.9% from the prior year, and the West index improved 6.2% in July to 61.3, dropping 12.8% from July 2022.
"Interestingly, the West region experienced a meaningful price decline in the past year, and buyers are quickly returning as a result," adds Yun.