Pending home sales decreased overall and in three of the four national regions in July, according to the National Association of Realtors (NAR) Pending Home Sales Index. However, nationally and in all four regions, pending home sales remain higher than one year ago.[IMAGE]
The West was the only region to post a month-over-month increase. Pending sales in the region increased 3.6 percent for the month and 20.6 percent from last July.
At 110.8, the West was also the only region to surpass a ranking of 100 for the month.
NAR's pending home sales are measured on a point scale with 100 being a historically healthy average.[COLUMN_BREAK]
The South came close to the historic average last month but slipped 4.8 percent to 94.4 for the month of July. This rate is 9.5 percent above last year's rate.
The Midwest was third on the scale at 79.1 for the month of July. Pending home sales in the Midwest fell 0.8 percent from the previous month but have risen 18.8 percent from the previous year.
The Northeast's pending home sales ranked lowest at 67.5 on NAR's scale. The rate is 2 percent below last month's rate but 9.7 percent above last year's rate.
""Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,"" said NAR's chief economist, Lawrence Yun.
""The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge,"" Yun said.
He added: ""It is now a question of lending standards and consumers having the necessary confidence to enter the market.""
NAR's Pending Home Sales Index measures contracts but not closings. Yun notes that not all contracts become closings, so there is some discrepancy between pending sales for a month and later-reported existing sales.