Following another disappointment in existing home sales in July, weak homebuilder sentiment, and plunging housing starts, pending home sales tumbled for the second month in a row in July (-2.3% MoM vs 0.0% exp - below thew worst forecast), dragging sales down 2.5% YoY - the biggest annual drop since April 2025...
This decline matches the second-worst reading in data back to 2001...
"The highest mortgage rates of the year hit right in the middle of summer, and that's pulling back contract signings," NAR Chief Economist Lawrence Yun said in a statement.
"Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations."
All four major US regions experienced a decline in demand during the month.
An index of pending sales in the South, the nation's biggest home-selling region, decreased 2.2% to the lowest level since January 2025. Pending sales dropped 4.7% in the West.
As a reminder, because houses typically go under contract a month or two before they're sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.
Translation - this is terrible news building on an already ugly situation in the US housing market.
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