Despite "Super-Low Mortgage Rates", July Pending Home Sales Plunge Back Into Contraction

Breaking the tie between new (down) and existing (up) home sales, pending home sales tumbled 2.5% MoM in July (notably below the expectation of 0.0%) and stumbled back into contraction year-over-year.

Source: Bloomberg

All regions fell in July:

  • Northeast fell 1.6%; June rose 2.7%

  • Midwest fell 2.5%; June rose 3.3%

  • South fell 2.4%; June rose 1.3%

  • West fell 3.4%; June rose 5.4%

Pending Home Sales retreated back into contraction YoY (by 0.3%)...

Source: Bloomberg

“Super-low mortgage rates have not yet consistently pulled buyers back into the market,” Lawrence Yun, NAR’s chief economist, said in a statement.

“Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.”

Pending home sales are often considered a leading indicator of existing-home purchases and a measure of the health of the residential real estate market in coming months.