Pending sales can be a good indicator of closed sales within one to two months.
In the past few months, affordability has dropped dramatically due to sky-high home prices. According to Realtors, the median price for an existing home rose 18% in July. This was partly due to the fact there was more activity at the higher end market, which tilted the median higher.
According to the National Association of Realtors, July saw a decrease of 1.8% in signed contracts for purchasing previously-owned homes compared to June.
Lawrence Yun, chief economist at the Realtors, stated that the market is cooling slightly but there isn't enough supply to meet the demand. "Despite this, inventory is steadily increasing so home buyers should expect to see more choices in the coming months.
According to Mortgage News Daily, mortgage rates dropped sharply in July. The average 30-year fixed rate was 3.18% at the beginning and 2.84% at the end of the month. This drop gave buyers more buying power which may have helped people who can't afford today's high house prices. However, the lower rates did not really boost the market.
The July 2013 Pending Sales were 8.5% lower than the July 2012 equivalent. This is an unusual comparison because sales spiked last summer following the initial shutdown caused by the pandemic.
The pending sales index of the Northeast Realtors fell 6.6% month-to-month and was down 16.9% year over year. It dropped 3.3% in the Midwest and 8.5% since July 2020.
Sales in the South fell 0.9% per month, and were 6.7% lower annually. Sales in the West rose 1.9% per month and fell 5.7% annually.
Yun stated that although homes for sale still attract great interest, the numerous, frenetic offers--sometimes twice as many--for one property have ceased to be a common occurrence in most areas.
The total housing inventory at July's end was 1.32 million units. This is 7.3% more than June's supply, and 12.0% less than one year ago (1.50million). At the July sales pace, there was an inventory of 2.6 months.
Closed sales of existing properties in July, which are contracts signed in May or June, increased for the second consecutive month.
