A floating sale sign outside a Miami home.
According to the National Association of Realtors, signed condominium purchase contracts were down 1.8% in July from June.
Sky-high property prices have caused affordability to drop dramatically in recent months. According to the broker, the median price for an existing home rose by 18% in July. Much of this was due to the fact that there was much more activity on the high end of the market, which skewed that median upwards.
Pending sales is a forward-looking indicator of sales that will close in a month or two.
“The market may start to cool slightly, but right now there isn’t enough supply to meet demand from potential buyers,” Realtors chief economist Lawrence Yun said in a press release. “Still, inventory is slowly increasing and home shoppers should see more options in the coming months.”
Mortgage rates fell sharply in July, with the popular 30-year fixing average starting the month at 3.18% and ending at 2.84%, according to Mortgage News Daily. That decline added purchasing power to buyers, which likely helped those who could marginally afford today’s high home prices. However, the lower prices weren’t enough to really juice the market.
Pending sales were down 8.5% from last July. This year-on-year comparison is unusual, however, given that sales rose so dramatically last summer after the initial shutdown due to the pandemic.
At the regional level, the Northeast Brokers Pending Sales Index fell 6.6% month on month and 16.9% year over year. In the Midwest, it fell 3.3% over the month and 8.5% from July 2020.
In the south, sales fell 0.9% over the month and 6.7% annually. In the west, sales increased by 1.9% a month and declined by 5.7% annually.
“Homes for sale are still attracting a lot of interest, but the numerous, frenzied offers – sometimes double-digit bids for a property – have disappeared in most regions,” said Yun.
The total housing stock at the end of July was 1.32 million units, 7.3% more than in June and 12% less than a year earlier (1.5 million). There was a 2.6 month supply of unsold inventory at the July sale pace
Sales of existing properties completed in July, which represent contracts signed in May and June, rose for the second consecutive month.