T
he U.S. home sales recovery did not occur as expected in July 2024, according to a report by the National Association of Realtors (NAR). The report showed a 5.5% drop in pending home sales, with all four U.S. regions experiencing a decline in transactions. The Northeast region bucked this trend, posting an increase in sales compared to last year, while the Midwest, South, and West regions showed decreases.
The Pending Home Sales Index (PHSI), which predicts home sales based on contract signings, fell to 70.2 in July, marking its lowest level since its inception in 2001. Year-over-year, pending transactions decreased by 8.5%. It's worth noting that a PHSI of 100 corresponds to the contract activity level in 2001.
Lawrence Yun, NAR's Chief Economist, commented on the report's findings, stating, "A sales recovery did not occur in midsummer." He attributed this to several factors, including affordability challenges and a degree of wait-and-see attitude related to the upcoming U.S. presidential election.
The regional breakdown of U.S. pending home sales data showed a mixed bag of results. The Northeast PHSI dropped by 1.4% from the previous month to 64.6 but was up by 2.4% compared to July 2023. The Midwest index decreased by 7.8% to 67.8 in July, representing an 11.4% decline from a year ago. The South PHSI fell by 6.5% to 83.5 in July, down 11.5% year-over-year. The West index declined by 3.8% in July to 56.2, a 6.0% drop from July 2023.
Yun also noted that the New England region had performed relatively better than other regions in recent months in terms of home sales and prices. He believes that current lower, falling mortgage rates will bring more buyers into the market.
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