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US pending home sales for July -0.4% versus -0.1% estimate

  • Prior month -0.8%
  • Pending home sales change month on month -0.4% versus -0.1% estimate
  • Pending home sales index 71.7 versus 72.0 last month.
  • YoY +0.7%

Regionally:

  • Northeast -0.6%
  • West +3.7%
  • Midwest -4%
  • South -0.1%

REALTORS® Confidence Index survey shows that 16% of NAR members expect an increase in buyer traffic over the next three months, unchanged from one year ago. Meanwhile, 21% expect an increase in seller traffic, up from 17% in July 2024.

The pending home sales are based on signed contracts. Redfin recently reported that 15% of signed contracts have been canceled – an all-time high level.

National Association of Realtor chief economist Lawrence Yun commented:

  • Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant.
  • Buying a home is often the most expensive purchase people will make in their lives. This means that going under contract is not a decision home buyers make quickly. Instead, people take their time to ensure the timing and home are right for them.
  • Rising mortgage applications for home purchase are an early indicator of more serious buyers in the marketplace, though many have not yet committed to a pending contract.
  • The Federal Reserve signaling that they may enact a lower interest rate policy should steadily enlarge the pool of eligible home buyers in the upcoming months.

Looking at the long-term chart, the index of pending home sales remains pinned near the lows, reflecting the drag from elevated interest rates, high prices, and tight supply. The dynamic has been compounded by the post-Covid period, when mortgage rates fell sharply and many homeowners locked in historically low financing—leaving them with little incentive to sell or move.

Against this backdrop, President Trump is seeking greater influence over the Federal Reserve, with the aim of installing a board more inclined to lower rates and ease the bottlenecks in housing. Yet, despite expectations for eventual policy easing, the yield curve has steepened, signaling bond market caution. Investors are wary that lower rates may not be a straightforward remedy in an environment where tariffs threaten price stability and complicate the inflation outlook.

The 10 year yield is trading at 4.23%. That is just below the 4.297% 100 week moving average. The 30 year mortage rate is often tied to the 10 year yield.

This article was written by at investinglive.com.