Pending home sales slide to weakest since start of year

Pending sales of previously owned US homes dropped in July to the weakest since the start of the year, illustrating a housing market plagued by elevated mortgage rates and prices.

An index of contract signings decreased 2.3% to 71.2, the lowest since January and matching the second-worst reading in data back to 2001, according to National Association of Realtors data released Tuesday. The median estimate of economists surveyed by Bloomberg projected no change in July pending sales.

READ MORE: Number of buyers drops to new low, but market shows sign of life

"The highest mortgage rates of the year hit right in the middle of summer, and that's pulling back contract signings," NAR Chief Economist Lawrence Yun said in a statement. "Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations."

The average 30-year mortgage rate is sitting just below the one-year high it hit in late July, locking many would-be sellers in their homes and making homes unaffordable for many buyers. 

Contract signings generally occur a month or two before closings and historically have provided a forward look at existing-home sales. Signings are down 2.5% from the same month last year, based on data unadjusted for seasonal variations.

READ MORE: Home prices, mortgage rates push down July originations

All four major US regions experienced a decline in demand during the month. An index of pending sales in the South, the nation's biggest home-selling region, decreased 2.2% to the lowest level since January 2025. Pending sales dropped 4.7% in the West.

The NAR data follow separate figures Tuesday from the government showing new home construction slumped in July as starts of single-family houses dropped to the weakest pace since 2022.