The Western U.S. was the only region to see pending home sales activity increase last month as the summer home sale season continued dragging along, according to the National Association of Realtors.
As real estate professionals continue trying to serve homebuyers who are wary of record-high prices and stubbornly high mortgage rates, the number of homes that went under contract last month dipped 0.4 percent nationally compared to June, NAR data show.
Pending sales were up 0.7 percent compared to a year ago, NAR said.
NAR’s pending home sales index is a measure of home sales activity compared to activity in 2001. The index is a leading indicator of home closings, and an index of 100 is equal to sales activity in 2001.
The index is at 71.7 as of July across the country.
“Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant,” NAR Chief Economist Lawrence Yun said in a statement. “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 home buyers make quickly. Instead, people take their time to ensure the timing and home are right for them.”
Still, even NAR’s July data — while forward-looking — may have preceded a bit of a bright spot for the market.
The average 30-year fixed interest mortgage rate slid from 6.83 percent at the end of July to 6.69 percent as of this week, according to the Mortgage Bankers Association.
That drop in rates came amid widespread expectations that the Federal Reserve will cut rates when it meets next month.
“Buyers are circling,” said Ali Mafi, a Redfin Premier agent in San Francisco. “House hunters are feeling more confident about buying a home now that mortgage rates have started to decline. Some are making offers now, though others are sitting tight, betting that rates will fall further. I’m telling buyers to act now because it’s still a buyer’s market, and most sellers are willing to negotiate. If rates do plummet, the market will get competitive.”
The number of active listings for sale was up 12.1 percent compared to a year ago, though the surge in inventory appears to be over and inventory is declining. There are 4.3 months of inventory on the market, an increase of about two weeks from a year ago, according to Redfin.
Home prices, pending sales and new listings are generally up the most in markets across the Midwest and Northeast, the Redfin data show.
