U.S. pending home sales declined for the second consecutive month in July, reflecting persistent headwinds in the housing market. The National Association of Realtors reported a 2.3% decrease in the number of homes under contract to be sold, excluding new constructions.
The decline contrasted with market expectations of a 0.1% increase, underscoring weaker-than-anticipated demand. The latest reading followed a sharper 4.8% contraction in June, indicating a modest sequential improvement despite ongoing challenges.
Higher mortgage rates and limited inventory continued to constrain buyer activity, analysts noted. The Federal Reserve’s restrictive policy stance has kept borrowing costs elevated, reducing affordability for prospective homebuyers. Inventory shortages, particularly at lower price points, have further constrained transaction volumes.
The pending home sales index, a leading indicator of future closings, has now fallen for two straight months. While the pace of decline has moderated, the broader housing market remains sensitive to interest rate movements and supply constraints. The data aligns with recent trends showing sluggish activity in the residential real estate sector.
