NAR Reports Decline In Pending Home Sales For July

July 2021 marked the second consecutive month of declines in pending home sales, according to the National Association of Realtors Pending Home Sales Index. Pending home sales declined by 1.8% to 110.7 in July. Meanwhile, year-over-year, signings fell by 8.5%.

“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 Lawrence Yun, NAR’s chief economist. “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.”

According to the NAR, as of July, 27% of buyers bypassed appraisal and inspection contingencies. By refraining from these evaluations, in most cases, buyers are looking to accelerate the homebuying process, according to Yun.

Month-over-month, the Northeast PHSI decreased by 6.6% to 92.0 in July, a 16.9% decrease year-over-year. In the Midwest, the index dropped 3.3% to 104.6 last month, down 8.5% from July 2020.

Pending home sales transactions in the South declined 0.9% to an index of 130.9 in July, down 6.7% from July 2020, according to the report. The West was the only region that recorded a month-over-month increase of 1.9% in July, however, the region was still down 5.7% from a year prior.