NAR: Pending Home Sales Index Drops 1.3% to 109.5 in July

Pending home sales fell 1.3% to an index reading of 109.5 in July, after an unrevised 0.4% decline to 110.9 in June, according to a report released Wednesday by the National Association of Realtors.

Economists polled by Thomson Reuters predicted that the index would be unchanged.

An index of 100 is equal to the average level of contract activity during 2001.

Year-over-year the pending homes sales index is up 6.7% from last July, when the index was 102.6.

Regionally, pending sales were mostly lower. The Northeast saw a 6.5% slip to 81.5, while sales fell 1.0% in the Midwest to 113.2. In the South, sales grew 2.6% to 121.5, and sales dropped 4.9% to 108.6 in the West.

"The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West," NAR Chief Economist Lawrence Yun said. "More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems."

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