Pending Home Sales Declined 1.0% in July
Washington, DC, August 24, 2022-The Pending Home Sales Index slid 1.0% to 89.8 in July, according to the National Association of Realtors. Year-over-year, pending transactions sank 19.9%. An index of 100 is equal to the level of contract activity in 2001.
"In terms of the current housing cycle, we may be at or close to the bottom in contract signings," said NAR chief economist Lawrence Yun. "This month's very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at lower price points is hindering transaction activity."
In June, housing affordability plummeted to its lowest level since 1989, according to NAR. Accounting for a 30-year fixed-rate mortgage and a 20% down payment, the monthly mortgage payment on a typical home jumped to $1,944, an increase of 54%, or $679, from one year ago.
"Home prices are still rising by double-digit percentages year-over-year, but annual price appreciation should moderate to the typical rate of 5% by the end of this year and into 2023," Yun added. "With mortgage rates expected to stabilize near 6% alongside steady job creation, home sales should start to rise by early next year."