Home Sales Lagging In July

July’s pending home sales declined, impervious to the relief posed by falling mortgage payments and rates. 

Despite improving affordability, pending home sales were down 5.7% year over year in the four weeks ending July 28 – the biggest decline in nine months – according to the latest Redfin data, released Thursday. Mortgage-purchase applications took a 14% YOY hit. 

This follows June’s 4.8% monthly increase in pending home sales from May, a 2.6% decrease YOY. 

Meanwhile, the median U.S. monthly housing payment was $2,667 during the four weeks ending July 28, reaching its lowest level since March. The median home-sale price was $392,563, down nearly $4,000 from its early July peak. New listings rose by 4% YOY - the lowest increase since November 2023. 

Redfin analysts noted in their report that although affordability constraints have eased slightly, prices and payments are still at near-record highs. In addition, much of the for-sale inventory is growing stale, with nearly two-thirds of listings sitting on the market for 30 days or more without going under contract.

“Local buyers are still worried about affordability, especially since wages haven’t caught up with home-price growth and inflation has cut into their budgets,” said Nicole Stewart, a Redfin agent based in Boise, ID. “But now that rates are declining, some fence-sitters are getting off the fence,” she added. “I’m working with some buyers who need larger homes to accommodate growing families, some who are relocating from California, Washington or Oregon, and some who are taking advantage of all the new builds in our area.”