U.S. pending home sales fell 1% in July amid economic uncertainty and higher mortgage rates, but activity increased from June, when sales were down 8.6%, Realtor.com reports. The latest decline marks the eighth time pending home sales have fallen in the last nine months, but as mortgage rates show signs of stabilizing, buyers could soon make a return to the for-sale market.
A lack of affordability is forcing buyers to back out of deals for existing-home sales, and sellers are responding by slashing their asking prices in some parts of the country. While homes are currently appreciating at a rapid pace, some market experts expect price growth to slow significantly by the end of the year.
What the realtors said: “In terms of the current housing cycle, we may be at or close to the bottom in contract signings,” NAR Chief Economist Lawrence Yun said.
The smaller drop this month as compared to the previous likely reflects mortgage rates stabilizing, Yun added.
But housing affordability has plunged to the lowest level since 1989, the NAR noted. For a household taking out a 30-year fixed-rate mortgage with a 20% down payment, the monthly payment for a typical home has increased by 54% from a year ago to $1,944, they said.
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