Pending Home Sales plunged 5.5% from June to July, per the National Association of REALTORS® (NAR), coming in well below estimates of a flat reading. Sales were also 8.5% lower than they were a year earlier. This report measures signed contracts on existing homes, making it an important forward-looking indicator for closings on these homes as measured in the Existing Home Sales report.
What’s the bottom line? While signed contracts on existing homes were soft last month, that’s not the whole story. It takes time for the impact of lower rates to translate into buyers shopping, finding a home, negotiating, and eventually signing a contract. NAR’s Chief Economist, Lawrence Yun, confirmed that “current lower, falling mortgage rates will no doubt bring buyers into market,” which means the volume of signed contracts will likely rise in the months ahead.
