A report released by the National Association of Realtors on Monday unexpectedly showed a continued slump in pending home sales in the U.S. in the month of July.
NAR said its pending home sales index tumbled by 1.8 percent to 110.7 in July after plunging by 2.0 percent to 112.7 in June. The continued decrease surprised economists, who had expected pending home sales to rise by 0.4 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
“The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers,” said NAR’s chief economist Lawrence Yun. “That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.”
“Homes listed for sale are still garnering great interest, but the multiple, frenzied offers – sometimes double-digit bids on one property – have dissipated in most regions,” Yun added. “Even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections.”
The unexpected decrease in pending home sales was partly due to a steep drop in the Northeast, where pending home sales plummeted by 6.6 percent.
Pending home sales also slumped by 3.3 percent in the Midwest and fell by 0.9 percent in the South, while pending home sales in the West jumped by 1.9 percent.