Pending home sales dipped slightly in July, noting two consecutive months of declines, according to the National Association of Realtors. The Pending Home Sales Index (PHSI) declined 1.8% to 110.7, and contract signings fell 8.5% year over year.
“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,” says 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.”
As of July, 27% of buyers bypassed appraisal and inspection contingencies. By refraining from these evaluations, in most cases, buyers are looking to accelerate the home buying process, according to Yun.
“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,” continues Yun. “Even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections.”
Only the West region registered a month-over-month gain in contract activity, while the other three major U.S. regions reported drops. All four regions saw transactions decrease year over year.
Month over month, the Northeast PHSI fell 6.6% to 92 in July, a 16.9% decrease from a year ago. In the Midwest, the index dropped 3.3% to 104.6 last month, down 8.5% from July 2020. Sales transactions in the South declined 0.9% to an index of 130.9, down 6.7% from July 2020. The index in the West rose 1.9% to 99.8, but still down 5.7% from a year prior.
