Market closer to bottom as pending home sales decline

US Pending home sales dropped 19.9% in July compared with July 2021. This economic reading is a a measure of signed contracts on existing homes. The figure fell along eight out of the past nine months as rising mortgage rates made housing less affordable.

Pending home sales, a measure of signed contracts on existing homes, slipped 1% from June to July, according to the National Association of Realtors. Compared to a year ago, sales were down 19.9%. The latest reading acts as a future indicator of closed sales. Higher rates pushed the typical mortgage payment up by 54% from a year ago, according to the NAR.

The drop in sales was smaller than previous months and could be a sign of the market settling, even if for a brief period.

The market looks closer to the bottom in contract signings and this month’s very modest decline reflects the recent retreat in mortgage rates.