U.S. pending home sales fall less than expected in July

A “For Sale” signal is posted outdoors a residential dwelling within the Queen Anne neighborhood of Seattle, Washington, U.S. Could 14, 2021. REUTERS/Karen Ducey/File Picture

WASHINGTON, Aug 24 (Reuters) – Contracts to purchase U.S. beforehand owned properties fell lower than anticipated in July as mortgage charges eased a bit, pulling some consumers again into the housing market.

The Nationwide Affiliation of Realtors (NAR) stated on Wednesday its Pending Residence Gross sales Index, primarily based on signed contracts, dropped 1.0% to 89.8 final month, the bottom degree since April 2020. Contracts have declined in eight of the final 9 months.

In July, contracts fell within the Northeast, South and Midwest, however rose within the West.

Economists polled by Reuters had forecast contracts, which turn out to be gross sales after a month or two, would drop 4.0%. Pending dwelling gross sales tumbled 19.9% in July on a year-on-year foundation.

The 30-year fixed-rate mortgage retreated from 5.78% in mid-June to five.30% on the finish of July, in line with information from mortgage finance company Freddie Mac. The speed at the beginning of the yr was 3.22%.

“When it comes to the present housing cycle, we could also be at or near the underside in contract signings,” stated Lawrence Yun, the NAR’s chief economist. “Inventories are rising for properties within the higher worth ranges, however restricted provide at cheaper price factors is hindering transaction exercise.”

The housing market is the primary space of the financial system the place the Federal Reserve’s aggressive financial coverage tightening marketing campaign to gradual demand as a way to tame inflation is attaining some outcomes. Knowledge on Tuesday confirmed new dwelling gross sales plunged to a 6-1/2-year low in July.

Residence resales and single-family housing begins are at two-year lows. The Nationwide Affiliation of Residence Builders/Wells Fargo Housing Market sentiment index fell under the break-even degree of fifty in August for the primary time since Could 2020, different stories confirmed final week.

However with home costs remaining elevated amid a important scarcity of reasonably priced properties, a housing market collapse is unlikely.

Reporting by Lucia Mutikani; Modifying by Paul Simao

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