Home Contract Signings Drop Year-Over-Year Amid Higher Mortgage Rates
Pending home sales in August rose slightly by 0.3% compared to July but fell 4.7% year-over-year, according to the National Association of Realtors (NAR). The decline reflects buyer hesitation due to higher mortgage rates that have climbed above 6.7%. While job gains and income growth are helping some buyers, they haven't offset the impact of rising borrowing costs. The housing market remains sluggish as contract signings remain below last year's levels across all regions except for the South and West. Contract activity is down roughly 30% compared to pre-pandemic norms. Analysts expect limited improvement in home sales this year, with mortgage rates likely remaining above 7%. Lawrence Yun of NAR noted that while buyers are still entering contracts despite higher rates, overall market momentum remains weak.
Topics: economic_data home_sales mortgage_rates