In July pending mortgage sales fell for a second straight month as the once red-hot housing market showed signs of slowing down.
The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, changed in the last month to 110.7, the lowest since April, according to the National Association of Realtors. A score of 100 is equal to the level of contract activity in 2001.
Analysts surveyed by Refinitiv were expecting pending home sales to rise 0.4% in July after falling a downwardly revised 2% in June.
The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers, said Lawrence Yun, NAR's chief economist. That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.
In July, total housing inventory increased for the sixth straight month with a NAR report indicating a rise of 7.3% to 1.32 million units. To be sure, inventories were 12% below the year-ago level of 1.5 million.
Signings annually decreased across all regions with the Northeast seeing the largest decline, a 16.9% decline. The transactions were also down 8.5% in the Midwest, 6.7% in the South and 5.7% in the West.
Homes listed for sale are still garnering great interest, but the multiple, frenzied offers sometimes double-digit bids on one property have dissipated in most regions, Yun said.